Grant Cameron. (0354806).
HEDGE funds are continuing to have a harmful effect on the total value of funds under management in Guernsey.
The credit crunch has caused an adverse performance of the global hedge fund sector during the second quarter of 2008.
Non-Guernsey schemes, for which some aspect of management or administration is carried out in the Bailiwick, decreased by £4.6bn (8.6%) to £48.7bn.
However this figure is still an increase of £18bn (58.6%) over the year since 30 June 2007.
Guernsey Investment Funds Association chairman Grant Cameron said the global crunch had negatively impacted on many of the hedge fund strategies, resulting in poor performance figures.
‘This phenomenon is not unique to us and the cyclical nature of some of these funds will mean that some of them will rebound.’
Non-Guernsey schemes were valued at £30.7bn in June 2007 and £48.8bn in June 2008. They peaked at £53.3bn in March.
Peter Moffatt, director of investment business at the Guernsey Financial Services Commission, said the decline was not surprising given that the credit crunch had affected the availability of leverage on which many hedge funds depended.
‘Nonetheless the value at June 2008 was still some £18bn higher than the value at June 2007.’
Funds under management and administration grew by £3.4bn (1.7%) over the quarter ended June 2008 to reach a total of £207.2bn.
Year on year, values increased by 33.2%, to £51.6bn.
Within this, Guernsey-domiciled open-ended funds grew by £2.2bn (3.1%) over the quarter and by £11.1bn (17.7%) over the year to reach a record £73.7bn.
The closed-end fund sector increased by £5.8bn (7.3%) over the quarter and £22.4bn (35.9%) over the year to reach £84.8bn, another record.
Mr Cameron said that while on the face of it the growth seemed to be slowing, an increase of any kind during this period was still very significant.
Gifa marketing committee chairman Horace Camp said it was good news that Guernsey’s fund business was still growing when global markets were going through trying times.
‘Assets under administration is a good measure, but what is really important is the fees that are earned in Guernsey.
‘The number of funds has not reduced, in fact is still growing, so fee levels will remain high.
‘The industry is not contracting, it is just that the value of the assets in the funds administered has fallen due to global conditions.’
In the quarter ended 30 June, 14 qualifying investor funds were approved and a further 21 registered closed-ended investment funds received consent.
Two hundred and five QIF vehicles have received consent or approval since inception of the regime in February 2005.
One hundred and eighteen registered closed-ended investment funds have received consent since the introduction of the regime in February 2007.
In the last six weeks alone, a further five registered closed-ended investment funds have received consent.
Mr Cameron said: ‘The registered closed-ended regime has proved very successful and is one of the latest examples of how the Guernsey fund industry responds to the needs of our clients and the ever-evolving industry.’
Article posted on 14th August, 2008 - 12.30pm
Most Commented: