An old face offers a fresh solution
At a time of unprecedented change in the asset management
community, investment houses will be glad to know
that Guernsey is a jurisdiction which not only is a well-established
international funds domicile but also provides innovative
solutions, including for open-ended platforms.
GLOBAL CLIENT BASE
Guernsey’s open-ended funds sector includes approximately
$140bn of hedge funds and funds of hedge funds
business as well as more traditional equity, bond and money
The popular Guernsey open-ended B Scheme is well
understood by the investment community for being distributed
into many countries around the world including Australia,
Hong Kong, Ireland, the Netherlands, South Africa,
Sweden and Switzerland.
There is a truly global client base, with promoters such as
Ashmore, BlueCrest, Citadel, Credit Suisse, FF&P, Investec,
Man Group, Marlborough, M&G, Schroders and Unigestion
utilising Guernsey open-ended investment platforms.
The environment in Guernsey
is particularly conducive for
establishing and servicing
open-ended funds: close
proximity to both the UK and
Europe but outside of the EU;
political and economic stability
with no external debt; an
OECD ‘white list’ jurisdiction
which has signed up to US
and UK FATCA and the OECD’s Common Reporting Standard;
experienced managers, administrators, custodians
and support services; flexible company law; access to major
stock exchanges; a competitive tax regime and high standards
of corporate governance.
Guernsey has a regulatory regime which provides a
modern statutory structure for appropriate investor protection.
Rules are relatively non-prescriptive (e.g. flexible
investment or leverage parameters) and instead rely on disclosure,
with lighter touch regulation for experienced investors.
A fast-track approval process is available, the regulator
is open to applications from new promoters and prime brokers
can be located either in Guernsey or elsewhere.
Guernsey funds continue to be distributed to both European
and non-European countries: a long-standing flexible
regulatory regime remains in place for those investors and
managers not requiring an AIFMD compliant fund, including
EU National Private Placement (NPP) regimes; and there is
an opt-in regime which is fully AIFMD compliant.
This provides a set of options which can be utilised
according to specific circumstances. The choice is solely a
commercial decision driven by distribution policies and fullblown
AIFMD compliance should only be sought if there are
particular reasons to do so. Figures from the Guernsey regulator
demonstrate the continued popularity of the Guernsey
NPP route under AIFMD.
Funds not solely focused on Europe should consider
parallel or feeder investment structures whereby EU and
non-EU business can be separated to achieve cost efficiencies.
There is a range of professionals with in-depth expertise in
structuring, administering and advising on complex vehicles
as well as experience in portfolio and risk management.
Some managers, such as
BlueCrest, have established
their headquarter offices in
Guernsey. A strong pool of
non-executive directors are
held in high esteem by the
investment community with
regard to the expertise, knowledge
and skills which they
take to the Boards on which
Quality of service in
Guernsey is evidenced by the fact that providers service
$150bn of open-ended funds that are domiciled in other
jurisdictions, typically Cayman or Delaware, where there
may be local substance challenges.
Guernsey has more than 50 years’ experience in global
cross-border fund structuring and distribution and that experience
is now helping it provide a fresh solution to meet the
challenges facing today’s promoters of open-ended funds.
Address: PO Box 655, North Plantation, St Peter Port,
Guernsey, GY1 3PN
Phone: +44 (0) 1481 720071
Fiona Le Poidevin argues that Guernsey’s 50 years of experience in global
cross-border fund structuring and distribution makes it an ideal jurisdiction
in which to nurture innovative open-ended funds
Finance – the
agency for the
www.investmenteurope.net InvestmentEurope October 2014
“ Guernsey has a regulatory regime
which provides a modern statutory
structure for appropriate investor
protection. Rules are relatively
non-prescriptive and instead rely on
disclosure, with lighter touch
regulation for experienced investors ”