Fund business boost for Guernsey

News - Funds

Written by Ray Clancy

Friday, 03 December 2010 11:26

The value of investment fund business in Guernsey grew by £18.9 billion, some 8.4%, during the third quarter of this year, new figures show.

The increase means that there have now been five consecutive quarters of growth and it has taken the net asset value of funds under management and administration in the Island to a new record high of £243.1 billion at the end of September 2010. This is an increase of £61.6 billion, 33.9%, on the same time in 2009.

Peter Niven, chief executive of Guernsey Finance, the promotional agency for the Island’s finance industry, said he is pleased to see that the momentum picked up in the second half of 2009 is continuing through 2010.

‘It has been a somewhat challenging time but these figures support our feeling that the sector is proving more than resilient and in fact is very well placed to maintain this growth moving into 2011,’ he said.

The new figures from the Guernsey Financial Services Commission (GFSC) show that Guernsey domiciled open ended funds reached a net asset value of £53.5 billion at the end of September, which was a rise of £0.2 billion, 0.4%, during the quarter and an increase of £2 billion or 3.9% year on year.

The Guernsey closed ended sector was valued at £105.9 billion at the end of September, up 12.7% to £11.9 billion during the third three months of 2010 and rose 30.6% to £24.8 billion compared to twelve months previous.

Non-Guernsey schemes, where some aspect of management, administration or custody is carried out in the Island, increased by 8.8% to £6.8 billion during the quarter to reach £83.7 billion at the end of September 2010, which is £34.8 billion, 71.2%, higher than the value at the end of September 2009.

Niven added that final agreement on the terms of the Alternative Investment Fund Managers (AIFM) Directive will add to Guernsey’s confidence on the future prospects for its investment funds industry.

‘The latest figures show that Guernsey’s funds sector is in good shape and reaching a conclusion on the AIFM Directive has added to our confidence for the future. It is still early days and we continue to look into the implications of the detail but generally it is positive news for Guernsey. Indeed, we believe that the agreement provides the Island with some real opportunities and early in the new year we will be working in conjunction with the government, regulator and industry to deliver some very strong and compelling messages to our introducer markets, most notably in London,’ he explained.

Meanwhile data from the London Stock Exchange shows that Guernsey is increasingly being used as a domicile of incorporation for Indian entities listing on AIM. Of those Indian entities on AIM at the end of October 2010 the latest five to list have all been incorporated in Guernsey, including all three added during this year.

The three listed during 2010 are iEnergizer, Skil Ports & Logistics Ltd and Caparo Energy Ltd who together have a market capitalisation of more than £500 million. These are in addition to Indian Energy Ltd that listed during 2009 and also Indus Gas Ltd which listed in 2008 and has a market capitalisation of more than £800 million. The other two Guernsey incorporated entities listed on AIM with India as a country of operation are private equity firm EIH Plc and The Indian Film Company Ltd.

‘The trends we can see indicate that Guernsey is now viewed as the jurisdiction of choice for incorporating Indian entities listing on AIM. In addition, we can see that these entities operating principally in India and incorporated in Guernsey are, in the main, sizeable companies and also spread across a broad range of sectors including private equity, transportation, energy and film,’ said Niven.

‘This is a very positive start in developing increased financial services links between the two jurisdictions. Just over a month ago we took our first official delegation from the Island to visit government and regulatory officials and industry practitioners in both Delhi and Mumbai. We feel it was a great success and that there are plenty of opportunities for Guernsey firms to provide Indian organisations and individuals with a range of financial products and services across the investment fund, private wealth management and possibly also the captive insurance sectors,’ he added.