Funds masterclass: ‘island is more competitively placed after achieving EU substance requirements’
THE island’s investment funds industry is more competitively placed after going through EU and Organisation for Economic Co-operation and Development economic substance requirements.
That was the verdict of speakers at a Guernsey Finance Funds Masterclass event in London. Achieving substance had become an increasingly important issue in jurisdictional choice and the island was now more strongly positioned in the market as a result, they said.
Frank Ochsenfeld, partner at Coller Capital, and Christopher Crozier, chief risk officer and managing director at Permira, two of the largest private equity managers who use Guernsey funds, both spoke positively about the island.
Mr Ochsenfeld said that it was crucial for Guernsey to have ‘embraced this issue head on’.
The substance principles adopted by the island offered ‘practical guidance and certainty’ for managers and investors, he said.
Mr Crozier said that Permira had already taken significant steps to developing substance through the EU’s AIFMD process earlier in the decade.
‘A Guernsey licensee will have quite good substance already – it is very hard to object to the principles – and we have always operated in a way which focused our decision-making in Guernsey and will continue to do so.
‘Much of this is just about being able to demonstrate that you are doing what you should be doing, and, in our case, what we’ve told our investors we’re going to do.’
Elena Rowlands, tax partner at Travers Smith, which specialises in the taxation of investment funds, described the Guernsey substance rules as ‘really helpful’ and said it was a ‘huge advantage’ for the island to have secured a white-listing from Europe.
Ms Rowlands was recently involved in a redomiciliation of a fund from Delaware to Guernsey.
‘When we listed all the factors as to why, AML record, substance rules, it really gives Guernsey credibility and I think it’s a huge advantage. If you had a choice, why wouldn’t you go for Guernsey?’
The event also heard from Tony Mancini, head of tax at KPMG in the Channel Islands, and Christopher Jehan, chairman of the Guernsey Investment & Funds Association.