In this Q&A, Locate Guernsey's Richard Le Tocq explains how in a world where uncertainty appears to be replacing certainty, Guernsey is underlining its inherent stability amidst the changes that are affecting the regulatory, commercial and political realms.
Guernsey's place as a centre of excellence for fund administration should be well known: a burgeoning sector that's been flourishing for years. But the Channel Island is increasingly being seen as a location for the managers of those funds as well as their administrators.
The Island's state-backed promotional arm, Locate Guernsey, is a little over a year old and its Head, Richard Le Tocq (pictured), is bullish about Guernsey's offering: "I'm confident about the future for funds in Guernsey: on our dashboard the dials are all positive. Five successive quarters of funds growth tells of a strong story. The most recent figures (released in January) indicate a ten percent growth, year on year, to stand at some GBP249 billion. That success is not down to any one thing of course; it's a combination of factors – many of which will be attractive to fund managers for whom the time might be right to consider a new base."
Le Tocq, who has a strong financial services background and is the immediate past-chairman of the Guernsey branch of the Institute of Directors, sees an alignment of issues which act as `push factors' for fund managers, while the Island itself has some existing and some new `pull factors'.
"Base Erosion Profit Shifting, more commonly known as BEPS, requires managers to consider important matters of business substance. That's very much a live matter for many managers and for those who have their funds already administered in Guernsey, relocating to the Island makes sound business sense," says Le Tocq.
In addition to BEPS there are other regulatory developments which Le Tocq considers to be positive for the island's funds sector.
"The Guernsey Financial Services Commission has, like the Island itself, been innovative over the years and with the recent regulatory changes such as the introduction of a Manager Led Product being a good case in point. This essentially shifts the regulatory focus from the fund itself to the Alternative Investment Fund Manager, which has a number of upsides for the manager. For managers this significantly reduces the regulatory and compliance burden associated with the launch of new funds, but keeps regulatory standards high to the satisfaction of the regulator. It's a win-win for the manager and for the island."
Guernsey's Regulator has permitted another innovation recently in the form of a Private Investment Fund; here too, according to Le Tocq, are multiple benefits for managers. "A Private Investment Fund is a very effective structure for managers looking to market a fund to multiple investors. Couple that with the Regulator's one-day turnaround for registration and it's another example of a regulator that is responsive to the needs and suggestions of a flourishing industry."
Locate Guernsey, as the name suggests, concerns itself with promoting and facilitating relocation and Le Tocq is aware that moving territories is a question that must work personally as well as professionally. Is a move to a small island something that works for everyone?
"It works very well indeed for most and there are lots of reasons why, but quality of life is probably the clincher,' he says. "People seem to re-connect with the good things in life when they make Guernsey their home. As we're a small place, journey times are much reduced so a happy by-product of that is that you get a lot of time back. That means you can still put in long hours, but you don't have to sacrifice family time and fun time to do so.
"In Guernsey, you're never more than a few minutes from a wonderful beach and with our beautiful scenery and pleasant climate, it helps to explain why Guernsey people make the most of our great outdoors. You don't feel cut adrift either. Yes it's a small island, but there are nine flights a day to three different London airports for example and the short flight times mean that getting into the City for example is quicker from our island in sight of France than it is from many parts of the London commuter belt."
But what of the upcoming UK withdrawal from the European Union? Could that be problematic for Guernsey and indeed for those considering a move to the Island?
"We see opportunity there," says Le Tocq. "Guernsey's relationship with the EU is unlikely to change as we are not part of the EU now, so that won't be impacted by Brexit and the quarter by quarter growth of fund assets under management and administration in Guernsey suggests faith in the future from the funds world.
"Certainly, the professional services community in Guernsey is very bullish about the sector and some of the numbers – 124 Guernsey funds listed on the LSE with a market capitalisation of more than GBP35 billion, to pick out just one statistic – indicate a well-used and well regarded financial services centre. Guernsey has strong relationships with the EU and its Member States as a third country in its own right, rather than as a dependency of the United Kingdom, due to the fact that over a considerable number of years Guernsey has been able to demonstrate equivalence to EU standards and there is no reason to suggest that existing market access rights will be impacted."
With more than fifty years of financial services expertise to call its own, Guernsey does have that maturity and, within the funds sector, a critical mass that serves as a foundation for future growth. Le Tocq outlines that accessing the Island should be straightforward for those making the move.
"Part of Locate Guernsey's role is to assist with actual relocations and for our newcomers we make those introductions to government, to industry and to other aspects of Guernsey life. The move over is straightforward and we provide guidance and help at every stage. We're keen to talk to fund managers who see all the benefits and are considering the move."
An original version of this article was first published in Global Fund Media's Guide to Relocation 2017, February 2017.