Guernsey Funds Top GBP250bn

by Jason Gorringe, Tax-News.com, London

08 March 2011

The Guernsey Financial Services Commission has published statistics in respect of the island’s funds industry for the final quarter of 2010.

The Net Asset Value (NAV) of total funds under management and administration, according to the Commission, grew by GBP14.3bn (5.9%) in the quarter that ended December 31, 2010, to GBP257.4bn. This shows a marked improvement in terms of total net asset values, which has increased by GBP73.2bn year-on-year (39.7%).

Within these totals, Guernsey-domiciled open-ended funds increased by GBP4.4bn (8.2%) over the quarter to reach GBP57.9bn. This represents an increase of GBP7.2bn (14.2%) over the year since December 31, 2009. The closed-ended sector saw growth over the quarter, with an increase of GBP3.6bn (3.4%) to reach GBP109.5bn. This represents an increase of GBP24.1bn (28.2%) over the year since December 31, 2009.

Meanwhile, non-Guernsey schemes (for which some aspect of management, administration or custody is carried out in the Bailiwick) increased by GBP6.3bn (7.5%) over the quarter to GBP90bn. Since December 31, 2009, the net asset value of this sector has grown by a staggering 87.1% (GBP41.9bn).

The gross asset value of Guernsey open-ended funds as at December 31, 2010, was GBP67.7bn, implying an average gearing level of 16.8%. The gross asset value represents an increase of some GBP5.4bn since September 30, 2010. In the closed-ended sector, the gearing level is slightly lower, with gross asset values of GBP127.6bn (September 2010: GBP125.1bn) implying a gearing level of 16.5%. The gearing implicit in non-Guernsey open-ended collective investment schemes is approximately 6.1%, based on gross asset values of GBP95.5bn (September 2010: GBP92bn).

Welcoming the figures, Peter Niven, the Chief Executive of Guernsey Finance said:

“It is extremely pleasing to see us move past the GBP250bn mark. Our funds industry has bounced back very well from the global financial crisis and in recording six consecutive quarters of solid growth we have clearly outstripped some of our closest competitors. These are encouraging signs and we must look to capitalize on this momentum as we move through 2011.”

“It is also very positive to see strong the strong growth split across both Guernsey open- and closed-ended funds and also the non-Guernsey schemes where some aspect of management. A significant increase in the number of these non-Guernsey funds entering into service level agreements with local licensees earlier in 2010 has notably boosted these figures but our Guernsey closed-ended funds also continue to attract a lot of interest, especially from promoters in alternative and niche asset classes and where there may also be a demand to raise money through capital markets by listing on a stock exchange.”

Concluding, Niven said that the significant increase in business for the island can be accredited to greater certainty provided by the agreement for the framework of the European Union’s Alternative Investment Fund Managers Directive.

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