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Alternatives drive funds growth in Guernsey

Funds under management and administration in Guernsey have hit another new high of nearly GBP 115bn - a rise of 37% year-on-year.

The announcement from the Guernsey Financial Services Commission shows that the value of funds under management and administration in the Island was GBP 114.8 billion at the end of June this year, compared with GBP 84 billion twelve months previously.

Within these totals, Guernsey domiciled open-ended funds grew by GBP 479 million (0.9%) over the quarter and by GBP 12.4 billion (30%) over the year since 30 June 2005 to reach a new record total of GBP 53.9 billion. Closed-end funds also grew, with increases of GBP 4.8 billion (14.2%) over the quarter and GBP 13.4 billion (53.5%) over the year since 30 June 2005, to reach GBP 38.6 billion, also a new record.

The value of non-Guernsey schemes for which some aspect of management or administration is conducted in the Bailiwick fell during the quarter by some GBP 1.8 billion (7.6%) to GBP 22.2 billion.  This decrease resulted from the impact of market movements on hedge funds during the quarter.  Since 30 June 2005 the value of non-Guernsey schemes has risen by 28%.  By the end of June 2006, a total of 58 Qualifying Investor Funds had been approved since launch of the scheme on 7 February 2005.

Peter Moffatt, Director of Investment Business at the Guernsey Financial Services Commission, said: 'New fund approvals continue to run at record levels and there is a continuing flow of inquiries, both from those with an established track record of domiciling their international funds in Guernsey and promoters new to the jurisdiction.  Demand from promoters to establish their funds in Guernsey, attracted by the quality of Guernsey's service providers and the recognition for pragmatic regulation has continued to increase significantly'.

'It is excellent news that we are continuing to see a substantial influx of new funds business into the Island despite new records being set each quarter for the value of funds in Guernsey,' said Peter Niven, Chief Executive of GuernseyFinance, the promotional agency for the Island's finance industry.

'Industry practitioners are reporting that they still have the capacity to take on more new business and as such are marketing the opportunities provided by Guernsey to their client base. The Island's fund sector is thriving and remains very much open for business.'

This marketing of Guernsey as one of Europe's leading jurisdictions for offshore fund services will be reinforced at the Guernsey Investment Fund Association (GIFA) conference 'Guernsey Funds 2006 - The Alternative Solution' which is to be held, in conjunction with GuernseyFinance, on Wednesday 27 September 2006 at the Queen Elizabeth II Conference Centre, Westminster.

'This conference comes at a time when traditional funds are performing well but the growth in alternative investments is particularly impressive,' added Mr Niven. 'The Island's fund sector continues to innovate, and is now evolving into the jurisdiction of choice for alternatives, which are particularly suited to Guernsey's offering.'

GIFA chairman Mike De Haaff added: 'Guernsey's fund industry is in excellent health. It is testament to the strength of the industry that there has been tremendous growth over the past year and yet practitioners are continuing to take on further new business. This strength and capacity to grow derives from the large and broad range of service providers with the necessary experience and expertise across the employment base, and the continuing investment in people and technology.'
The total number of funds in Guernsey now stands at 845, which is up by 110 from June 2005 (15%) and a rise of 46 in just one quarter (6% from the end of March 2006). The number of Guernsey open and closed-ended schemes increased by nearly 7% over the quarter and non-Guernsey schemes by 2.5% during the same period.

By the end of June 2006 a total of 58 Qualifying Investor Funds (QIFs) had been approved since the launch of the scheme in February last year.

A root and branch review of investment sector legislation has been conducted this year and a set of proposals for revising the system of regulation will go before Guernsey's parliament early in 2007.

The working party, chaired by Guernsey advocate Peter Harwood, has recommended that the focus of regulation should be on the licensed Guernsey administrator, reducing the number and scope of funds that will be regulated directly and therefore making it easier and quicker to do funds business in Guernsey. It has also been proposed that regulatory changes be made to facilitate Guernsey service providers to administer non-Guernsey funds.

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