Guernsey Remains Private Equity Leader

by Jason Gorringe, Tax-News.com, London

05 September 2008

The latest developments within Guernsey’s funds industry show that the island continues to be a leading jurisdiction for private equity, according to Peter Niven, Chief Executive of Guernsey Finance, the government's investment promotion agency.

New figures show that in the second quarter of the year the value of private equity funds in the island grew by nearly GBP1bn (2.5%) to reach GBP36.2bn. This is despite the difficult market conditions that have seen amounts raised by private equity funds across Europe fall by some 10% this year.

It has also been announced that the management of Guernsey-based IPES – backed by private equity firm RJD Partners – is buying out the provider of dedicated private equity administration services for in excess of GBP20m.

In addition, another Guernsey-based private equity administrator, Augentius, has been celebrating 400% growth in assets under administration since a management buyout two years ago.

“These developments are yet further evidence that Guernsey continues to be a leading jurisdiction for private equity,” said Mr Niven.

He continued:

“Fund promoters and sponsors recognise that Guernsey’s experience in this asset class has helped build a broad industry with specialist expertise and including administrators providing bespoke IT solutions. They have also been attracted by the introduction of Qualifying Investor Funds (QIFs) – a self-certification regime targeting experienced investors – and the launch of our ‘fast track’ registered funds regime.

“However, it could be argued that the listing of the USD5bn Guernsey limited partnership KKR Private Equity Investors LP on the Amsterdam Euronext was so innovative that it has been the largest single contributor to the island’s recent success in the asset class. It highlighted that Guernsey was one of the few jurisdictions from where funds wishing to list on Euronext do not need to obtain a licence in the Netherlands because the Dutch AFM has ruled that there is already adequate ‘home’ supervision. It also put Guernsey on the map internationally and particularly in the US, something from which the island has never looked back as it has become the jurisdiction of choice for private equity.”

Mr Niven concluded by noting that this success is illustrated by the fact that Terra Firma and Permira have recently both established their own operations in the island.

Recommended