Monterey Insight’s latest Guernsey Fund Report reinforces why the island remains a domicile of choice for the fund industry.
Guernsey has long been considered as a strong centre in the servicing of alternative assets – a position highlighted again in the findings of Monterey Insight’s Guernsey Fund Report. Fund assets serviced in the domicile stood at $532.7 billion as at the end of June 2021, a 24 percent increase from 2020.
The number of schemes domiciled in Guernsey also increased to 1,222 in 2021, while the total number of sub-funds reached 1,443, compared to 1,135 and 1,372 respectively in 2020.
Among Guernsey-domiciled funds, private equity/venture capital funds are once again the most popular with total AUM of $307.2 billion, representing a 31 percent increase on the previous year. Alternative Investments follow those at $50.2 billion and proving to be the biggest growth area with an increase of 54 percent.
The research shows that Guernsey has upheld its centre of excellence reputation and continued to attract new business amid uncertain times. More than 90 new groups and sub-funds were launched – the strongest growth in a decade. This new business accounted for $24.4 billion of assets, of which $22.2 billion were Private Equity/Venture Capital products totalling 62 groups and sub-funds.
Further, over 90 serviced funds and sub-funds migrated to the island adding $10.2 billion of assets, bringing the total of new business to $34.6 billion from 180 funds and sub-funds.
The strong growth during 2021 for the island’s funds industry was driven in part by continued investor appetite for Private Equity, says Patrick Cummins (pictured), Managing Director, Guernsey at Apex Group, but also Guernsey’s knowledge and experience in the funds sector, underpinned by an exceptional talent pool in the services industry.
Guernsey is also seen as a jurisdiction that is responsive to change and keen to embrace innovation. One example of Guernsey’s robust regulatory regime and ability to innovate is the recent revision of its private investment fund (PIF) rules to create the most comprehensive and flexible suite of options of any private fund regime.
The evolution of the traditional fund model has continued with an ever-increasing number of single asset co-investment vehicles being incorporated.
“In 2021, it was recognised that they offer flexibility, swift market and deal access and the ability to scale up or down according to the specific deal requirement, allowing investors to participate or opt-out in a much more practical and efficient way,” comments Patrick.
“The regulatory environment in Guernsey has once again shown itself to be innovative and forward-thinking in 2021, with the extension of the popular PIF regime, offering increased flexibility and speed to licensing for promoters and family office groups.”
ESG leader
To add to that, as of September 2020, 75 percent of assets held in Guernsey-regulated funds are managed or administered by firms adopting the UN’s Principles of Responsible Investment, seen as increasingly important factor in servicing alternative assets.
“We expect to see continued appetite for our ESG Ratings & Advisory services including portfolio ESG data reporting and carbon footprint calculation,” Patrick predicts.
