Latest News

Establishing your first alternative investment fund – which Island in the sun?

It is that time of year when many in the alternatives investment industry in Europe head off on vacation for a couple of weeks rest and relaxation. Whether chilling out by a pool or enjoying some fresh mountain air, this is often an opportunity to grab some time for strategic thinking – which in many cases involves planning the next career step. For some, that next step may be a move within an existing organisation or to a competitor. For others, thoughts may turn towards setting up in business on one’s own. If you fall into the latter group, establishing your own fund management operation or investment fund may be your goal. Whilst the tropical climes of the Caribbean hold a certain attraction as a domicile for new ventures such as these, there are credible alternatives far more convenient for those living in or near the mainstream European financial centres – and which also provide beautiful sunsets without the need for long-haul travel! One such location is the Channel Island of Guernsey. The Island has long been regarded as an attractive domicile for alternative investment vehicles. Open ended funds, including hedge funds and other “liquid alternatives” were the foundation upon which the fund servicing industry originally developed, and still make up a substantial proportion of the assets under management and administration. In recent years, the private equity, venture capital and real estate sectors have flourished – recent figures released by the GFSC note 1 show that the value of funds under management and administration on the Island grew for the seventh consecutive quarter and now stand at GBP 266... read more

Myriad of choice for start-up hedge fund managers

Whilst in London recently I attended an event focused on start-up hedge fund managers. Although the number of launches in 2016 was down on recent years, those at the cutting edge in London at least, are reporting an uptick in the number of funds launched towards the end of the year or which are otherwise in the pipeline.  Opening discussions on the prospects for sector growth quickly turned to discussions on the cause of the lower numbers and the challenges facing new start-ups. Prospective hedge fund managers face a myriad of choices when establishing a new hedge fund operation.  This article highlights some of the key areas for consideration. Internal operations A good starting point is to consider the expectations of the target investor base. Is it necessary to build an institutional grade infrastructure with significant numbers of permanent staff, dedicated IT systems, prestigious office premises and the like or is a more modest operation sufficient? Whilst the days of a laptop, access to a trading system and a few spreadsheets are long gone, it is worth considering whether the core investment and risk management teams can be supported by individuals with specialist knowledge in the areas of accounting, finance, regulatory compliance and IT security on a part time or contract basis. There are clearly pros and cons of each approach, but if tight control of costs in the early years is an absolute priority – which in many cases it is likely to be – it is perhaps worth building a lower cost but scalable operation which can be expanded as AUM grows. Stand-alone fund versus platform It... read more

Continued strong performance by Guernsey’s fund sector

Whilst UK-based fund promoters and distributors have perhaps had the odd sleepless night given the uncertainty created by the British public’s vote to leave the EU, that may not have been the case amongst Guernsey’s service providers. Figures released today by the Guernsey Financial Services Commission for the third quarter of 2016 show that the industry has recorded it fifth successive quarter of growth. The increase in NAV was most noticeable in the open ended sector which recorded a 10.4% increase during the 3rd quarter. In sterling terms that equates to £4.3 billion. Whilst there was a slight decrease in the NAV of closed ended funds during the quarter, the number of funds actually increased and on a year-on- year basis, the closed ended sector saw growth of £14 billion. I was a little surprised to see a reduction in the number of Non Guernsey Schemes serviced on the Island as I understand from discussions with several service providers that at least some are seeing significant interest in this area. Overall, the growth is perhaps not unexpected given the Island’s long-held reputation as a stable jurisdiction.  Such “safe haven” status may well prove attractive to promoters looking to restructure fund platforms or even their internal operations. For those interested in or potentially impacted by Brexit, Guernsey Finance is hosting a Funds Masterclass in London on 8th February where fund raising in a post-Brexit world will be discussed. Please contact Icorserv if you would like to attend or require further details on this... read more

Guernsey introduces new Private fund regime

The Guernsey regulator has today announced the introduction of a Private Investment Fund regime. This new regime follows closely on the heels of the launch of the “Manager Led Product” in May this year which itself was designed to offer an attractive alternative to Luxembourg’s Reserved Alternative Fund or “RAIF”. The Private Investment Fund offers promoters a highly flexible form of collective investment scheme which takes only one business day to register with the Guernsey Financial Services Commission. As the new fund will have a cap of 50 legal or natural persons holding an ultimate economic interest, it is expected to appeal to family offices and similar wealth managers who enjoy a close relationship with a limited number of investors. Other key features of these private funds include: Absence of a requirement for an offering document or information particulars to be produced, No cap on the size (NAV) of the fund, No minimum subscription or holding for investors, No limit on the number of potential investors to whom the fund can be marketed, Available in both open and closed ended form, Ability to structure the fund as either a company, limited partnership or unit trust, Considerable flexibility in the investment objective of the fund. The applicable rules do not prescribed any investment restrictions, A licensed manager is necessary and will be required to provide the regulator with certain warranties on the ability of the investors to assume loss, A Designated Administrator in Guernsey must be appointed although the Designated Administrator has power to delegate any function, No requirement for a custodian in the case of a closed ended fund.... read more

Bright Future for Infrastructure Fund Services in Guernsey

Having recently returned from a couple of days at the SuperReturn Infrastructure conference in London, I thought I would take a few moments to reflect on certain topical aspects of infrastructure investment – at least as far as it impacts on fund centres such as Guernsey. A copy of the article I wrote recently appeared on the website We Are Guernsey and can be downloaded by clicking here. The full text is also set out below: With the recent news that Macquarie has successfully closed its latest Euro 4 billion European infrastructure fund with the assistance of two Guernsey firms, Paul Bannier, Director at Icorserv, reflects on certain topical aspects of infrastructure investment – at least as far as it impacts on fund centres such as Guernsey. Growth in demand When measured on a global basis, a huge demand exists for infrastructure investment. Statistics published by the United Nations project that the world population will increase by approximately 83 million people per year during the next two decades with much of the growth taking place in Africa and Asia. Aside from the obvious need for food, water, basic healthcare and housing, population growth triggers demand for energy, transport links and modern telecommunications networks  to name but a few. At the other end of the spectrum in developed nations, life expectancy continues to increase with for example, additional demands placed on the healthcare and welfare systems. Governments in developed countries have generally under – invested in infrastructure projects and even where investment may be regarded as “adequate”, many governments are seeking to shift funding from public finances to privately financed... read more

Strong performance from Guernsey funds in first half of 2016

Figures released recently by the Guernsey Financial Services Commission show that Guernsey funds performed strongly in the first half of 2016, despite notable volatility in some markets in the first couple of months of the year. Open ended funds saw a total NAV increase of approximately 6.6% in Sterling terms taking the total net asset value of funds authorised and registered on the Island to over GBP 41 bn. Closed ended funds saw an even more impressive 9 % increase with a total reportable NAV of GBP 153 bn at mid year end. Whilst acknowledging the favourable impact of exchange rates on the numbers, the statistics indicate that Guernsey continues to prove attractive to promoters looking to launch new investment vehicles on the Island – and in some cases have management or administration provided by specialist firms on-Island although the funds themselves may be domiciled elsewhere. During the first six months of 2016, 42 new open ended funds (cells of umbrella structures) were launched although overall, the total number of authorised and registered schemes was largely unchanged. The position was similar in the closed ended sector – possibly due to the fact that although new funds continue to be launched, a number of private equity funds established in the mid-2000s are reaching the end of their fixed... read more

LLC Law introduced in Cayman

  On 27th April 2016 the Cayman Islands passed legislation introducing a Limited Liability Company regime. These hybrid vehicles are corporate bodies with separate legal personality which offer members a high level of flexibility in the management and operation of the LLC. As with US –style LLC’s, a Cayman LLC enables each member  to have a capital account and for the  profits and losses to be allocated and distributed to members as those members may agree amongst themselves in the LLC agreement. The new vehicles,  which complement the existing company and limited partnership regimes, are expected to be popular particularly for hedge funds and private equity structures. For further information please contact... read more

Good governance key to Guernsey’s international standing

The following article by Sara Bourne, Head of Corporate at the Carey Group and Chair of ICSA’s Guernsey Branch is reproduced courtesy of the Guernsey Press. Good Governance key to Guernsey’s international standing “There is increasing recognition of the vital role that corporate governance plays in keeping the economy, and the businesses that underpin it, in robust health. However as the environment within which businesses operate becomes ever more complex, corporate governance arrangements are increasingly being put to the test. Stripped back to its simplest sense, corporate governance is about having the right people, processes and structures in place to achieve an organisation’s objectives efficiently and effectively. It is not simply a box-ticking exercise. Done well, it means that businesses can ensure sustainability without stifling creativity. Contemporary governance challenges include the fight against cyber crime, the management of intellectual property, board-level responsibilities for the development of strategy, succession planning and the embedding of socially responsible practice. All have an impact on a company’s reputation. With reputation one of the most powerful drivers of business success and trust and transparency crucial to long term success, implementing and maintaining a culture of trust and transparency is key. This is where governance professionals who steer boards and businesses in the right direction fulfil a vital role. Improving business conduct through the implementation of good governance is a key way of managing potentially destructive reputational risks. With offshore jurisdictions vilified by politicians in the ongoing debate over tax avoidance and the regulation of financial services stricter than it has ever been, corporate governance and the professionals who manage it are under the spotlight... read more

Guernsey’s Chief Minister writes to David Cameron

Chief Minister writes to Prime Minister As the fallout from the leakage of the “Panama Papers” rumbles on, Guernsey’s Chief Minister has recently written to the UK Prime Minister, David Cameron pointing out that Guernsey has demonstrated its “active and practical commitment” to the international anti-corruption agenda. The letter points out to the Prime Minister that Guernsey was one of the first financial centres in the world to regulate its fiduciary and corporate services providers, and that the Island has worked in a “timely and effective” manner to comply with global standards. A recent evaluation report by the Council of Europe’s monitoring group Moneyval, showed that Guernsey has in place a range of measures to facilitate various forms of international cooperation and plays host to authorities and financial institutions that are highly competent, knowledgeable and aware of their obligations. The move by the Chief Minister appears to be in line with that being taken by several other Crown dependencies and British overseas territories to raise awareness of the factual position in relation to transparency and international cooperation and to counter criticism of these jurisdictions by uninformed... read more

Guernsey implements Common Reporting Standard

On 26th January 2016 the regulations providing for the automatic exchange of information in relation to tax – otherwise known as the Common Reporting Standard on Automatic Exchange of Financial Account Information – were laid before the meeting of the States of Guernsey and are thus deemed to have come into effect on 1st December 2015. As is the case with those other jurisdictions which have signed up to this OECD – developed framework, the CRS regulations require financial institutions who are subject to the regulations, to implement due diligence procedures in respect of financial accounts which they maintain. These procedures are required in order to ensure that the financial institutions are able to identify and report certain information to the Tax Authority in Guernsey thus enabling the Tax Authority to forward the information to the appropriate overseas tax authorities. The first exchange of information takes place in 2017 and relates specifically to 2016 data. A copy of the regulations together with draft Guidance Notes and the OECD’s implementation book, are available on the government’s website,, or from Icorserv... read more

Slight fall in number of Cayman funds in Q4 2015

According to statistics recently published by the Cayman Islands Monetary Authority, the total number of Mutual Funds in Cayman fell slightly in the fourth quarter of 2015 relative to the numbers recorded in the mid half of the year  – although at 10,940, the total number remains higher than that reported at the end of the first quarter. The number of Administered and Licensed funds was broadly constant throughout the year with the reduction seen in the number of Registered and Master funds. Speaking at a Fund Forum event in Cayman at the end of last year, Cindy Scotland, the Managing Director of CIMA commented that the industry remained strong and is expecting continued growth. Full details can be found on CIMA’s website;... read more

New account opening procedures for Cayman CRS funds

With effect from 1st January 2016, Reporting Financial Institutions including investment funds are required to have new account opening procedures in place in order to meet the requirements of the Regulations issued by the Cayman Islands Tax Information Authority which form part of the Common Reporting Standard (“CRS”) regime. In October 2015, following an announcement earlier in the year by the Cayman Islands government that it would implement the OECD Common Reporting Standard, regulations were issued setting out the due diligence and reporting requirements which apply to Reporting Financial Institutions (“RFI”) in the Cayman Islands. The classifications and definition of RFI are similar to those under FATCA. Under the regulations, investment funds should have updated their subscription documents and investor on-boarding procedures to ensure that the necessary tax identification and tax residency information is obtained from new subscribers to the fund. In addition, with effect from 1st January 2016 all pre-existing investor accounts – i.e. those existing as at 31 December 2015 – are subject to additional due diligence procedures in order to ensure that the funds or their administrators have identified reportable accounts and hold the information necessary to make the required filings to the Cayman Islands Tax Information Authority in... read more

Guernsey funds increase during third quarter

The net asset value of funds under management & administration in Guernsey increased by 2.2% during the third quarter of 2015. Increases were spread right across the broad sector with Guernsey-domiciled open ended funds, closed ended schemes and Non Guernsey schemes  (where some aspect of management, administration or custody is carried out in the Island) all recording increases. The NAV increase reflects  performance-related gains / losses and net new investment to existing funds as well as subscriptions  to a significant number of new funds established on the Island during the... read more