Investment fund ‘seminal moment’ for island economy
GUERNSEY is announcing to the world that it is ‘open for business’ by setting up an investment fund, according to the vice-president of Policy & Resources, as he predicted its formation would prove to be a ‘seminal moment’ for the island’s economy.
Up to £25m. of public money will be invested in existing and start-up businesses through the Guernsey Investment Fund, which will be managed by Ravenscroft and run by an independent board.
Two private investors have been confirmed so far – MXC Guernsey Ltd will put in up to £5m. and Pula Investments an unspecified amount.
‘This is one of the most important events in my political career,’ said Lyndon Trott, who has been in the States for 18 years.
‘Guernsey is sending out a strong message of confidence about its future. We are shouting from the rooftops that we are open for business and putting our money where our mouth is.
‘This has been a long time in the gestation and it is an example of the different sectors working well together for the benefit of the Bailiwick of Guernsey.’
Business cases from interested parties will be considered against a set of criteria and the likelihood of success, first by the administrator and then by the board.
Investors will be buying equity in a company, rather than loaning money to them.
Deputy Trott said the governance structure of the fund would ensure good management and lines of accountability.
‘We have scoured the globe for examples of best practice and used that to help inform us when creating this structure,’ he said.
‘That is not to say there are no risks, but these are minimised and mitigated by the well-understood and accepted governance model that has been put in place.’
‘The real professional people will be making properly informed decisions overseen by an independent board of specialists.
This is not some Mickey Mouse project with lay-people making guesses – this is a significant, professional entity that is directed by its investors to make decisions that are in the best interests of the Bailiwick of Guernsey.
‘It has the potential to be a marriage made in heaven and my honest assessment is that this will be an absolutely seminal decision that leads to diversification and growth in our economy.
‘What makes this so exciting is that we are not doing this in a distressed environment, for instance when we had to purchase Aurigny 15 years ago, we are doing this in a proactive way that sends a very strong signal that Guernsey is open for business.’
Some of the island’s ‘most sophisticated investment companies are joining the States in this endeavour.
‘That is comforting and reassuring as they will insist upon best practice. I would be much less confident if the States was doing this as a sole investor.’
Deputy Trott said that while the fund would support technology and innovation in the first instance, it did not unduly privilege these sectors over others.
‘This is only one of three cells, the other two being property and infrastructure, so over the duration of this fund it is likely the infrastructure cell will be developed, which could be anything from transport to waste disposal.
‘Some people say the States has not got a practical plan to grow and diversify the economy,’ he concluded. ‘To these people I say ‘’speak to the manager of the Guernsey Investment Fund’’.’