Guernsey adds 42 new funds in quarter two

Guernsey’s financial services regulator approved 42 new investment funds during the second quarter of this year, resulting in a total of 131 additions during the 12 months to the end of June.

Figures from the Guernsey Financial Services Commission (GFSC) show that 33 new funds were approved during the third quarter of 2013 and 30 during the fourth, along with 26 during the first quarter of 2014 and 42 during the second quarter.

The GFSC approved two open-ended funds, 17 closed-ended funds and 23 non-Guernsey open-ended schemes between the start of April and the end of June. Taking into account licences relinquished, this represents net growth of 13 funds during the quarter and takes the total number of funds currently approved for domiciling or servicing in Guernsey to 1,108.

Fiona Le Poidevin, Chief Executive of Guernsey Finance – the promotional agency for the Island’s finance industry, said: “It is encouraging to see this high number of new funds being approved for domiciling or servicing in Guernsey. The fact that this straddles the transitional period for the introduction of AIFMD [the Alternative Investment Fund Managers Directive] shows that promoters recognise the advantage of Guernsey’s ability to distribute funds into both European and non-European jurisdictions to best meet their specific circumstances.

“During the second quarter, Citco Fund Services established new administration operations in the Island, which is a huge vote of confidence in Guernsey’s fund industry. Not only are we seeing repeat fund launches from established houses such as Mid Europa and John Laing but also managers which are new to Guernsey, such as Fair Oaks Capital and SQN Capital Management. These fund launches have been primarily in the closed-ended sector but across a variety of asset classes, including private equity, property, debt, infrastructure and energy – and especially where there is demand for a listing.

“The figures also show that during the second quarter there were a significant number of new ‘non-Guernsey’ open ended schemes approved for management, administration or custody in the Island. This reflects the significant substance which already exists in Guernsey, especially in comparison to some other jurisdictions and this is likely to be an increasingly important differentiator.”

The statistics from the GFSC show that the net asset value of all funds under management and administration in Guernsey fell by £2.9 billion (1.1%) during the second quarter to £261.3 billion at the end of June.

Guernsey open-ended funds decreased in value by £1.9 billion (4.4%) to £40.7 billion and Guernsey closed-ended funds fell by £0.8 billion (0.5%) to £135.7 billion.

Non-Guernsey schemes – open-ended funds that are not domiciled in Guernsey but where some aspect of management, administration or custody is carried out in the Island – decreased in value by £0.2 billion (0.2%) during the second quarter to reach £84.9 billion at the end of June.

Miss Le Poidevin added: “Although we’ve seen a fall in value of funds under management or administration in the last quarter, this is partly a symptom of general market conditions and currency exchange rate factors. Nevertheless, it also demonstrates the continued challenges facing the industry and the need to stay ahead of the game. Overall, Guernsey’s funds sector is in a stable position – we’ve seen growth in the number of new funds coming to the island and a positive response to our regime under AIFMD – and as long as we respond appropriately to the head winds then I am optimistic for the long term future of the industry.”