Guernsey fund business grew by £6.2 billion in first quarter 2011

The value of investment fund business in Guernsey grew by £6.2 billion, some 2.4%, during the first quarter of this year, according to the latest figures to be published.

The increase represents the seventh consecutive quarter of growth and takes the net asset value of funds under management and administration in the Island to a new record high of £263.6 billion at the end of March 2011. This is a rise of £66.2 billion, 33.6%, compared to the end of March 2010.

‘We are continuing to build very positively on the exceptional growth during 2010 to start this year with a further, if slightly slower, increase in the value of funds business carried out in the Island,’ said Peter Niven, chief executive of Guernsey Finance, the promotional agency for the Island’s finance industry internationally.

‘It was always going to be difficult to sustain the rates of increase experienced last year but the fact that we have maintained the upward trend and now recorded seven consecutive quarters of growth shows the strong way in which our funds industry has bounced back from the financial crisis. These figures are the latest in a number of positives at play during the last few months and this is very encouraging for the future of Guernsey’s funds sector,’ he added.

The figures from the Guernsey Financial Services Commission (GFSC), show that Guernsey domiciled open ended funds reached a net asset value of £57.6 billion at the end of March, which was a decrease of £0.3 billion, 0.6%, during the quarter but an increase of £1.5 billion, 2.7%, year on year.

The Guernsey closed-ended sector was valued at £114.8 billion at the end of March, up £5.3 billion, 4.8%, during the first three months of 2011 and rose £22.5 billion, 24.4%, compared to twelve months earlier.

Non-Guernsey schemes, where some aspect of management, administration or custody is carried out in the Island, increased by £1.2 billion, 1.3%, during the quarter to reach £91.2 billion at the end of March 2011, which is £42.2 billion, 86.1%, higher than the value at the end of March 2010.

‘The figures are an endorsement of Guernsey as a jurisdiction for the administration of a diverse range of funds. All three categories, open ended, closed ended and non-Guernsey schemes have stood up well which is extremely encouraging coming on the tail of significant increases in 2010,’ said Patrick Firth, chairman of the Guernsey Investment Fund Association (GIFA).

‘This really does illustrate the strength of Guernsey’s funds industry at the moment and we will be looking to sustain this momentum during 2011,’ he added.

Niven highlighted that the figures follow hot on the heels of Guernsey being given the green light for its companies to list on the Hong Kong Stock Exchange (HKEx). data from the London Stock Exchange (LSE) showing that there are more Guernsey companies and securities listed on its markets than there are entities from any other competitor jurisdiction.

Also a recent survey from Private Equity News/State Street showing that 61% of chief financial officers prefer Guernsey as their destination of choice for private equity outsourcing.

‘Taken together, these developments show the extremely high regard in which our investment sector is held internationally. Guernsey Finance will be continuing to work with industry to ensure that we press home these very positive messages to key decision makers not just in the City of London, traditionally our principal source of new business, but also in the emerging markets such as China, India and Russia. There are plenty of reasons to be optimistic for the future however we must not rest on our laurels but continue to drive forwards to ensure that the Island retains its place as a leading international funds centre,’ explained Niven.

He also believes that Guernsey has benefited from the greater certainty provided by the framework agreement for the EU’s Alternative Investment Fund Managers (AIFM) Directive. He added that there is much work still to do in relation to the details of Directive but the continuing efforts of government, industry and regulator mean that Guernsey is well positioned.