Asia Asset Management December 2014/January 2015 31
Much focus in Europe in recent years has been on the
European Union’s (EU’s) drive for increased regulation,
principally through the Alternative Investment Fund
Managers Directive (AIFMD).
As a result, promoters and investors from further afield have
become more cautious about raising money from within Europe
because of what they regard as a growing compliance burden
and increased costs.
The Guernsey model
However, rather than being part of the problem, Guernsey is part
of the solution because while the Island is in Europe geographically,
it is not in the EU and therefore, has not been required to
Guernsey offers a dual regulatory regime whereby it is possible
to continue to distribute Guernsey funds into both EU and
The approach means managers and funds with no connection
to Europe can still use Guernsey’s continuing regulatory rules
which are free from the requirements and costs associated with
For managers wishing to market into Europe, Guernsey provides
a European platform but one which is not actually in the
EU. Indeed, the National Private Placement (NPP) route is being
favoured by many as it means little or no change to how things
were done before AIFMD.
Guernsey also has a new opt-in regime which is fully AIFMD
compliant for those who require it.
For those managers with elements of both EU and non-EU
business, parallel or feeder structures can be utilised.
In summary, the point is that Guernsey’s dual regulatory
regime provides optionality that allows clients to be serviced
in the manner most appropriate to their specific circumstances.
Promoters can achieve true substance in Guernsey fund structures.
The infrastructure offers professionals with in-depth
expertise in structuring, administering and advising on complex
vehicles and structures as well as experience in portfolio and
The Island plays host to a number of major managers such
as Apax, Apollo, HarbourVest, Man Group, M&G, Pantheon,
Permira and Schroders, all of whom have their funds domiciled
and serviced in Guernsey (with a number also having offices
and staff present). Administrators and custodians range from
major international names, such as Northern Trust and State
Street, to specialist independent service providers.
There is also a plentiful supply of independent non-executive
directors who underpin Guernsey’s reputation for high standards
of corporate governance.
Guernsey’s funds industry
now manages and administers
more than 1,000 funds
valued at nearly half a trillion
US dollars, with Guernsey
domiciled investment funds
distributed to all corners of
Quality of service is evidenced
by the fact that
Guernsey providers now service
US$140 billion worth of
open-ended funds which are
domiciled in other jurisdictions where there may be local substance
The Island is a gateway to capital markets and is currently the
global leader for non-UK London Stock Exchange (LSE) listings.
Guernsey companies can also list on many other international
stock exchanges including Euronext, Hong Kong, and Australia
amongst others. In addition, the internationally recognised
Channel Islands Securities Exchange (CISE) provides a costeffective
means to access capital or technical listings.
The first Chinese currency focused bond fund, the Renminbi
Bond Fund was established in Guernsey in 2007 by Stratton
Street Capital LLP as an open-ended fund in a Protected Cell
Company (PCC) structure. It is listed on the Irish Stock Exchange.
Managers, including many from Asia, are of the view that regulation
is making it especially difficult to market funds into Europe.
Guernsey offers a solution based in a European time zone with
access to the EU market but without the administrative and cost
burden of AIFMD unless required and from a jurisdiction which
has significant substance, high standards and a global reach.
• Situated in Europe between the United Kingdom (UK)
• A British Crown Dependency
• Special relationship with the European Union (EU)
• Population of 60,000 people
• English speaking
• Currency: British pound Sterling (GBP)
• Same time zone as the UK
• Links to both London and wider Europe
* Fiona Le Poidevin is chief executive of Guernsey Finance – the promotional
agency for the Island’s finance industry
Guernsey – helping fund managers
navigate through Europe By Fiona Le Poidevin*
Fiona Le Poidevin