The London Stock Exchange's recent announcement of its plans to launch a new Specialist Fund Market will provide ‘exceptional opportunities’ for the industry in Guernsey, according to one of the island's leading fund lawyers.
Advocate Ben Morgan, a partner at Carey Olsen, said that this is a very significant move by the LSE, as it looks to fill a perceived gap between its own market for listed securities and the Alternative Investment Market (AIM).
"Because the funds industry in Guernsey has never been so vibrant, with more than GBP140 billion under management, it’s likely this new classification will attract a considerable amount of interest locally. As it focuses on specialist investment funds, it’s a great fit for Guernsey because we’re particularly strong in that sector, subject, naturally, to sight of the precise terms of the new listing regime," he observed.
The new market, for unlisted securities, will aim to provide sufficient flexibility for specialist fund vehicles such as single strategy hedge funds and private equity vehicles that wish to attract institutional, professional and highly knowledgeable investors.
Advocate Morgan continued: "A London-listed fund will be a big plus for investors who will see its associated liquidity as a positive too. While many specialist funds are AIM-listed, it’s likely that this classification will be seen as superior, so I expect we’ll be talking to many players in the industry about what’s involved in achieving this new listing and how funds can be traded on it."
Admission to trading on the Specialist Fund Market is a two stage process for
Guernsey funds, which will first require approval of the prospectus
by the Guernsey Financial Services Commission, and then an application to the
LSE for admission to trading on the Specialist Fund Market.
“The establishment of this new classification is every bit as significant
as the opening up of offshore fund listings under Chapter 14, which is to be
replaced when the new single platform is introduced” concluded Advocate Morgan.
The new market will be open for admissions from 1 November 2007.
A comprehensive report in our Intelligence Report series examining offshore investment, offshore stock exchanges, trusts and hedge funds is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp
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