Impact investing
Technological developments
Areas of innovation
Comment
This article is part of a series on future wealth and succession planning, and long-term investing in Guernsey (for the first article in the series please see "Guernsey private wealth – families investing in their future").
Socioeconomic and environmental issues remain at the top of the global agenda, and for so long as they do, any structures – no matter how innovative – risk not having their desired impact. As a result, families, high-net-worth and ultra-high-net-worth clients have been taking a more active role in utilising their wealth and the culture of innovation to fight against these issues.
Families and advisers have, for some time now, been delving into the world of impact investing, including relating to environmental, social and governance issues. This area has moved into the mainstream and appears to be a permanent strategy for consideration, rather than just a hot topic or tick-box exercise.
Guernsey advisers are seeing an increased demand for advice on the ability to vary structures to take into account such investing strategies. However, the need to drastically change planning already in place can be avoided if:
- a family's transfer of wealth is planned with the understanding that the next generation may wish for the wealth to "do more"; and
- flexible planning is integrated into the family's future wealth management strategies.
Guernsey has built a reputation over the past few years as an innovative and forward-thinking jurisdiction focused on sustainability in how it does business. Together with its commitment to uphold international standards, Guernsey is committed to a culture of innovation with a breadth of expertise and experience in the green and sustainable finance sector.
In order to achieve this, Guernsey has been at the forefront of investment and technology developments, working closely with industry to introduce legal and regulatory solutions that cater for the fast-paced development of technologies and digital investments.
While maintaining a robust regulatory regime and high standards across all financial services, Guernsey has also strived for decades to be one of the best jurisdictions in which to do business. This is reflected in its continuous technological developments over the years, including:
- the development of an online registry for companies, limited partnerships, foundations and, most recently, charities;
- the Guernsey Financial Services Commission's Innovation Soundbox Hub, which provides an open channel of communication to aid the development of innovative products and services, among other things;
- the validity of electronic signatures in Guernsey, as codified in the Electronic Transactions (Guernsey) Law 2000 (as amended); and
- the introduction of the Electronic Transactions (Electronic Agents) (Guernsey) Ordinance, 2019, which confirms contracts dealt with by way of electronic means (for example, executed or terminated) and presumes the natural persons that the electronic agents are acting for intended to create legal relations.
In addition to Guernsey being a modern jurisdiction in which to do business, what business Guernsey can carry out is continuously reviewed to ensure the island stays ahead. Some areas of impressive innovation include:
- the development of private investment funds, including a specific category designed for use by family investors (for further details, see "Guernsey three routes to PIF establishment");
- the introduction of the Guernsey Green Fund and the Natural Capital Fund regimes (for further details, see "Guernsey Green Funds – an environmentally friendly wrapper");
- the use of blockchain technology for the first time in Guernsey's private equity funds market, which allows real-time access to data and a full view of the fund's lifecycle, permitting easy communication with investors, efficiency and transparency;
- the establishment of the International Stock Exchange (TISE) Sustainable, a specific segment of TISE dedicated to financing sustainable businesses, investments and projects generating positive environmental impact; and
- the creation of a number of crypto asset holding trusts catered for by the modern and flexible provisions of the Trusts (Guernsey) Law 2007.
There is a multitude of reasons why Guernsey is and will continue to be a modern, stable and innovative jurisdiction in which to conduct business. Of course, notwithstanding this, advisers – both those in Guernsey and those abroad working with services provided in Guernsey – need to consider what they are doing to prepare their clients and families for the future and the best way to take advantage of what Guernsey currently has to offer and what it may offer in the future.
For further information on this topic please contact Catherine Moore or Tehya Morgan at Ogier by telephone (+44 1481 721672) or email ([email protected] or [email protected]). The Ogier website can be accessed at www.ogier.com.