Guernsey sees three straight years of funds growth

Tuesday 13 March 2018

The total value of funds business in Guernsey has risen again after figures from the Guernsey Financial Services Commission confirmed a growth of £1 billion in the three months to the end of 2017.

The latest figure of £270 billion also represents an increase of approximately £14 billion (5.6%) over the previous 12 months and a third consecutive year of growth for Guernsey’s fund sector.

Guernsey’s financial services regulator approved 18 new investment funds during Q4, 17 of which were closed-ended and the remaining one open-ended, a big increase of 44.4% on Q3’s 10 new funds.

Guernsey Finance Chief Executive Dominic Wheatley was encouraged to see both quarterly and annual growth in the latest figures, particularly seen in a rise in administration being carried out locally for non-Guernsey schemes:

“Whether the quarterly figures are going up or down, the best indication of a jurisdiction’s stability is to look at the longer-term trend, and so to look at the statistics and see the total net asset value of funds in Guernsey on the rise in both the short and longer term is indicative of a stable environment. With so much uncertainty in the world, it’s good to see Guernsey continue to be a location of choice for many fund managers, particularly those who are familiar with the environment."

“The local administration of non-Guernsey schemes demonstrates substance the island has developed over many years, and it is paying dividends. An increase in new funds suggests, as predicted, that managers from all around the world are hedging against potential Brexit issues and Guernsey is providing answers to the uncertainty.”

Open-ended funds decreased by 1% over the quarter to £166.4 billion, but still achieved annual growth of £1.2 billion (2.8%). Closed-ended funds increased over both the quarter (0.26% to £166.4 billion) and the year (4.46% to £7.1 billion).

Non-Guernsey schemes – funds not domiciled in the island but with some aspect of their management, administration or custody carried out locally – grew by £1.4 billion (2.3%). An increase of £6.1 billion (11.31%) since 31 December 2016 values them at £60.4 billion.

Real estate funds were the biggest mover, with the net asset value showing a year-on-year increase of 42% to nearly £21 billion, boosted by a strong Q4. There was also an increase of 8.89% in the number of real estate funds over the year, from 90 at the end of December 2016 to 98 at the end of December 2017.

Guernsey Investment Fund Association Chairman Paul Smith welcomed the figures: “I am optimistic about 2018. The mood in the industry has been positive in the early part of the year and I look forward to seeing that coming through in the statistics throughout the year.

"The figures show that Guernsey is still the jurisdiction of choice for a wide range of asset classes and the increasing administration of non-Guernsey schemes is evidence that Guernsey is able to provide real substance for fund managers that may be lacking elsewhere.  We are continuing to work on further diversification in the type of funds that are established in Guernsey and the already numerous markets in which Guernsey funds can be promoted.”

Pictured: Guernsey Finance Chief Executive Dominic Wheatley