Fund Sector Booming In Guernsey

by Carla Johnson, Investors Offshore, London

08 November 2006

Guernsey’s fund servicing industry grew by 32% to reach US$189.8 billion in net assets (GBP102.6 billion) over the year to 30 June 2006, Lipper Fitzrovia’s twelfth annual Guernsey Fund Encyclopaedia reveals.

Last year’s total was US$143.4 billion (GBP80.0 billion); an 18% increase on 2004.

Guernsey’s position as a centre for more specialised funds is highlighted with assets invested in private equity/venture capital funds now standing at US$59.3 billion domiciled on the Island. Further, of new funds launched over the year, European private equity/venture capital funds attracted the largest proportion of assets (US$5.8 billion)

Ed Moisson, Director of European Fiduciary Operations at Lipper Fitzrovia, said: “Our research highlights Guernsey’s ability to thrive in an evolving financial marketplace. Assets invested in private equity funds and funds of hedge funds outnumber the more mainstream products, but all combine to contribute to the Island’s success. “

For fund administration services of both domiciled and non-domiciled funds, International Private Equity Services (IPES) is the largest administrator by total net assets (US$31.7 billion). Northern Trust is second in terms of fund assets (US$30.9 billion) and ranked first by number of funds (262 funds).

IPES jumps from third to take the lead among custodians, servicing US$20.4 billion assets. Royal Bank of Canada (US$19.1 bn) and Northern Trust (US$17.1 bn) are the next largest.

Among professional firms, KPMG is the largest auditor of Guernsey serviced funds, auditing 386 funds, ahead of PricewaterhouseCoopers (348 funds). For legal advisers, Carey Olsen now offers legal advice to 630 funds, with Ozannes following in second place with 455 funds.

The largest promoters of funds domiciled on the Island, by assets under management, are Apax Partners (US$13.5 billion), Permira (US$12.2 billion) and Financial Risk Management (FRM) (US$11.9 billion).

Neale Jehan, Partner, KPMG, commented, “KPMG Channel Islands Limited is delighted to be named again this year as the largest auditor of Guernsey serviced funds. In dynamic times for the Guernsey industry, we have invested in ensuring that we have the capacity to deliver a quality service to our growing fund clientbase. We have well over 100 staff in Guernsey servicing all types of funds and whilst we continue to see growth in the property, private equity and hedge fund sectors, there is also significant growth in the asset backed security and structured products sectors. These sectors are vital to Guernsey as it continues to explore new niches.”

Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Covering over 143,000 share classes and over 75,000 funds domiciled in 59 countries, Lipper is the world's leading fund research and analysis organisation. It provides the free Lipper Leader ratings for mutual funds registered for sale in 20 countries.

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