Private equity/venture capital funds continue to remain the most popular product of serviced funds topping asset allocations with $379.8bn, followed by alternative investment with $63.4bn.
The same trend applies for Guernsey domiciled funds, with private equity/venture capital again the most popular by assets under management of $291.7bn, followed by alternative investment with $63.4bn.
‘Private equity achieved record levels of fund raising in 2021 with almost $1 trillion raised, eclipsing other alternative fund sectors,’ said Ben Morgan, partner and head of Carey Olsen’s corporate and finance group in Guernsey.
‘Guernsey, as the preferred offshore domicile for PE funds and acquisition stacks, has been a massive beneficiary of this growth. Lending into this sector has also turbo-charged this sector with highly borrower friendly debt markets and consequently record buyout activity, particularly in the tech sector. Clients with funds in Guernsey have huge amounts of dry powder to deploy, which also bodes well for 2023.’
Nearly 100 new groups and sub-funds serviced in Guernsey were launched during the year, with new business accounting for $71.0bn of assets, of which $14.9bn (approximately 60 groups and sub-funds) were private equity/venture capital products. More than 60 serviced funds and sub-funds migrated to the island adding $6.5bn of assets.
This brings the total of new business (newly launched and newly served) to $23.5bn with more than 160 funds and sub-funds.
‘Guernsey has continued to be extremely buoyant,’ said Mr Morgan.
‘Given the challenging economic circumstances it is impressive that Guernsey’s funds sector has shown such resilience, stability and growth. It underscores Guernsey’s position as a centre of excellence for the domiciliation of investment funds for many of the largest fund managers in the world.’
Carey Olsen continues to be the largest legal adviser by both number of funds advised and by assets with respectively 960 funds and $368bn. In the ranking table of funds, Mourant takes second place with 162 funds and Ogier takes third place.
‘This year again Guernsey has capitalised on the positive results showing resilience to the many challenges of the current period such as the war in Ukraine, the energy crisis and high inflation,' said Karine Pacary, managing director of Monterey Insight.
'In this context, Guernsey managed to attract circa 20 new promoters/initiators who came and established their funds on the island and four new administrators are now newly referenced in the 2022 Monterey report.
‘On the topic of ESG, Guernsey positioned itself strongly with green-tailored funds which represented US$7.0bn as at June 2022. In addition to the regulated green funds, an additional $7.0bn of assets have been invested in sustainable/ESG funds.’
No change in ranking for asset managers
THE top two asset managers maintain their ranking in the 28th edition of Monterey Insight’s Guernsey Fund Report. Apax Partners retains first position as the largest promoter/initiator of serviced funds with US$54.2bn and Permira retains second spot with US$34.3bn. Third spot was taken by HgCapital with US$29.9bn closely followed by Cinven with US$29.4bn.
Northern Trust remains in top position across all three rankings of fund administration, custody and transfer agency. Across both domiciled and non-domiciled funds, Northern Trust leads as the largest administrator by total net assets with US$100.1bn.
Aztec Group maintains its second place ranking with US$79.9bn of assets, with Apex Group in third position with US$59.3bn.
Among custodians, the ranking of serviced funds remains the same as last year: Northern Trust top the rankings with US$44.5bn, BNP Paribas takes second position with US$10.1bn, while Butterfield Bank is in third place with US$9.7bn.
For the top positions among transfer agents, Northern Trusts retains its lead position with US$92.5bn, Aztec Group regains its second place with US$69.1bn, with Apex Group in third position with US$58.7bn.
Head of Northern Trust, Channel Islands, Dave Sauvarin, said: ‘Following an exceptionally strong performance in 2021, the Guernsey fund industry has demonstrated its resilience in 2022. In these times of multiple global macro events and economic headwinds, Guernsey offers stability and experience through its highly-established financial services infrastructure. This is especially relevant to private equity/venture capital funds which have once against topped the island’s asset allocations. Guernsey is also at the forefront of responding to the growing investor appetite for sustainability-focused products, as demonstrated by the launch of the Natural Capital Fund regime in September 2022, which complements the Guernsey Green Fund designation.’
PwC maintains its leading position
The ranking for auditors remains unchanged, as it has for a number of years. PwC maintains its leading position auditing 454 funds and sub-funds, ahead of KPMG with 261 funds and sub-funds. The positions for third and fourth place are swapped again this year with EY taking third place ahead of Deloitte.
PwC also takes lead position in the ranking by assets with US$164.8bn, followed in second place by KPMG with US$16.6bn and Deloitte in third position.
‘We are confident that Guernsey, with its robust regulatory environment, appropriate structures and first-class professional services, will continue to play a really important role in providing top quality advice to both local and global organisations across all sectors of the financial services industry,’ said Evelyn Brady, managing partner at PwC Guernsey.