THE largest private equity firms could be tempted to set up their headquarters in Guernsey. But Internation Private Equity Services director Peter Gillson said it might not be possible for all of them, especially those at the smaller end of the market.
He believes that what the famously outspoken boss of Alchemy Partners, Jon Moulton, said last month at an Institute of Directors lunch about such firms setting up more than just administration offices in the island was feasible, but only to an extent.
‘I think what Mr Moulton says about head offices being located in Guernsey as well as the funds is possible for the larger players, those at the large MBO end of the industry where they have the critical mass to open a full office. But it is important to remember that the private equity industry consists of firms of various sizes from the smaller venture-capital operations, which have head offices with maybe fewer than a dozen people, to the MBO players the size of Alchemy.
‘I would not expect to see the head offices at the mid or smaller end of the industry relocating.’
Mr Moulton had said an indication that the island was becoming more and more attractive to such firms was that some, including Apax and Terra Firma, had already set up administration offices here.
Mr Gillson believes a possibility for growth of the industry in the island would be for some of the investee companies of funds, particularly those in the early stages of business, to relocate since the tax regime would be very favourable for profitable and expanding companies which would be reinvesting profits for growth.
However, he said that would be hampered by the population cap and the lack of land.
‘But a reason why it could be beneficial to encourage the investee companies of private equity firms into Guernsey would be if Commerce and Employment wanted to rebalance the economy and to enlarge the industrial sector.’
Article posted on 9th November, 2007 - 12.00am
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