FUND managers are attracted to Guernsey for its flexibility in handling alternative structures, according to one expert.
Guernsey Investment Funds’ Association chairman Grant Cameron, pictured, said the island was an appealing jurisdiction because of its ability to deal with private equity, hedge, property, distressed debt and fund of funds.
According to a recent article published by the Financial Times Advisor, a lot of fund managers are looking to move out of places like Guernsey in order to set up Sicav funds elsewhere.
Luxembourg-based group KMG Sicav Sif launched a platform earlier this summer which it claims has a faster route to market and cuts costs.
‘On the contrary, we feel there are a lot of fund managers looking to move to Guernsey and others are looking to reinforce their strong links to Guernsey,’ said Mr Cameron.
‘The quarterly statistics for the period ended 31 March support this, with £203.8bn-worth of funds under administration in Guernsey, which translates to a year-on-year increase of 45.2%.
‘As a jurisdiction, Guernsey remains attractive for alternative fund structures such as private equity, hedge, property, distressed debt and fund of funds.’
Flexibility means that most structures can be domiciled in Guernsey and the outsourcing guidance notes permit certain activities to be performed by parties off the island, while ensuring that the key oversight and governance activities remain here, said Mr Cameron.
According to the FT Advisor, the aim of KMG’s Sicav funds platform is to give wealth managers, financial advisers and fund managers more control over their investments.
In recent months, a number of IFA firms such as Bestinvest, Tenet and Openwork have launched their own fund ranges, while more are understood to be considering the idea.
KMG director Kevin Mudd said the platform was perfect for fund managers looking to rationalise their business and move out of places like Guernsey.
‘The main thing with the platform is that it simplifies life for IFAs. They can make an instant decision for their clients.
‘In the UK, very few advisers are regulated to distribute their own funds. While they are giving very good investment advice, they are only halfway there.’
The process of setting up a new fund was relatively quick because the group is licensed and regulated in Luxembourg, he added.
But Mr Cameron said that this sort of activity did not represent a threat to Guernsey.
‘One area where the large EU fund jurisdictions such as Ireland or Luxembourg do have an advantage over jurisdictions outside the EU is as a domicile for retail ucits funds which can be passported from one EU country to the next.
‘However, these type of funds have never been part of the Guernsey industry.’
Article posted on 4th August, 2008 - 2.30pm
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