Buoyant funds sector shrugs off the crunch

FUNDS under management in Guernsey continue to grow. The sum in management and administration grew by £8.9bn (5.7%) over the quarter ended 30 September to reach a new high of £164.5bn.

Over the year ended 30 September values increased by £44bn, an increase of 36.5%, despite recent market turbulence and the fact that the strength of sterling will have effectively deflated the reported values of funds denominated in US dollars or currencies linked to it.

'This is a very impressive set of results,' said Peter Niven, chief executive of GuernseyFinance.

'Guernsey's funds industry has been particularly buoyant in the past couple of years and so it is not surprising that with such a solid foundation, it has proved resilient in the face of a host of pressures at play during the quarter.

'It is testament to the robust nature of the island's funds industry that as others have struggled during the credit crunch, despite a dip in our growth as some funds held back from coming to market we have continued to make exemplary progress.'

Within these totals, the closed-ended fund sector saw continued growth, with increases of £5.2bn (8.4%) over the quarter and £23.9bn (54.7%) over the year to reach £67.6bn.

Guernsey domiciled open-ended funds grew by £2.5bn (4%) over the quarter and by £11bn (20.4%) over the year to 30 September to reach a total of £65bn.

Peter Moffatt, director of investment business at the Guernsey Financial Services Commission, said the figures were good news.

'These figures are evidence, despite recent market turbulence and the impact of movements in currency exchange rates on net asset values, of continuing confidence in the Guernsey investment fund sector.

'As the figures show, the qualifying investor fund and registered closed-ended investment fund regimes are being extensively used by local firms to service the needs of their fund-promoter clients.'

Non-Guernsey schemes, for which some aspect of management or administration is carried out in the Bailiwick, again saw growth and increased by £1.2bn (3.9%) over the quarter and by £9.1bn (39.5%) over the year to reach a record high of £31.9bn.

In the year to 30 September, a total of 65 QIFs were approved. Since inception of the QIF regime in February 2005, a total of 130 such vehicles have received consent or approval.

On 1 February this year, a registered closed-ended fund regime was introduced. By 30 September, a total of 55 registered closed-ended investment funds had received consent.

Since then a further 12 have received consent under this regime.

Gavin Farrell, member of the Guernsey Investment Funds Association executive and marketing committees and partner of law firm Ozannes, said: 'These figures illustrate how we have continued to experience strong flows of business despite the credit crunch and with such a large amount of work still coming in, I am confident that this will remain the case throughout the end of this year and into the first quarter of 2008.'