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.