Island a ‘global leader’ in funds
Why are there so many funds in Guernsey?
Kevin Smith, director, fund services, Estera Guernsey, replies:
GUERNSEY is a global leader in investment funds and has been for over 50 years. There are currently nearly 1,000 funds based or serviced here, managing more than £260bn of assets for investors.
One reason these fund managers choose to base their operations out of Guernsey is the wealth of expertise that has built up on the island over the five decades that the industry has been here.
There is an infrastructure in Guernsey for delivering first-class services to funds, including experienced fund managers, administrators, custodians and market-leading lawyers and bankers who focus on the sector.
Another key attraction is the Guernsey regulatory regime. The Guernsey Financial Services Commission is recognised for being pragmatic and open, working closely with the fund industry to make sure the rules are proportionate and not overly complex. At the same time, the GFSC is constantly innovating to meet investor and fund manager expectations and to launch new products that keep Guernsey at the cutting edge of industry developments. The recent consultation on the Guernsey Green Fund is an example of this. It is also possible to gain approval and launch funds very quickly.
Meanwhile, Guernsey is recognised as one of the world’s pre-eminent offshore finance centres, providing investor protection and the highest standards of corporate governance and oversight. As a jurisdiction it is attractive because of its long history of political stability, its proximity to UK and European markets and its international outlook.
The funds industry here does business in more than 55 different jurisdictions, with both investors and investments located all over the world. Guernsey provides a tax-neutral environment which generally means that investors are taxed in their countries of residence rather than the funds themselves being taxed.
Guernsey has been home to a wide variety of funds for half a century, across a range of asset classes that now includes alternatives such as private equity, venture capital, real estate, infrastructure, debt, hedge funds and funds of funds.
As these newer asset classes have grown, so the capabilities here have expanded to keep up, which explains why Guernsey remains one of the top funds markets worldwide.