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Guernsey fund industry continues to grow despite tricky market conditions, says Lipper

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Guernsey’s fund servicing industry grew by 20 per cent over the past year to reach USD331.4bn (GBP166.5bn) in net assets as of June 30, according to the latest edition of Lipper’s Guernsey

Guernsey’s fund servicing industry grew by 20 per cent over the past year to reach USD331.4bn (GBP166.5bn) in net assets as of June 30, according to the latest edition of Lipper’s Guernsey Fund Encyclopaedia, the 14th in a series launched by Fitzrovia International.

Lipper says the total in June last year was USD275.4bn (GBP138.4bn), a 45 per cent increase from mid-2006. It’s not clear whether the discrepancy with the figures published by the Guernsey Financial Services Commission, which reported GBP207.2bn in fund assets under management and administration in Guernsey at the end of June this year, represents funds domiciled but not serviced in Guernsey or different compilation methodologies.

Northern Trust is the largest administrator of both domiciled and non-domiciled funds with USD61.5bn in total net assets, followed by International Private Equity Services with USD34.4bn, two self-administrators, Apax Partners with USD34.2bn and EQT Fund Managers with USD17.1bn, and HSBC Security Services with USD15.4bn.

Northern Trust also has the largest proportion of assets under custody with USD35.8bn, again ahead of Ipes with USD21.5bn, followed by HSBC Custody Services with USD20.0bn, Kleinwort Benson with USD14.1bn and RBC Wealth Management with USD11.6bn.

‘Northern Trust’s recognition as Guernsey’s largest administrator and custodian, for the second year in a row, reflects our ability to meet the dynamic, asset servicing needs of our international fund manager client base,’ says Vic Holmes, chief executive of the group’s operations in the Channel Islands operations.

‘Our specialist teams in Guernsey draw on our longstanding local expertise, backed by Northern Trust’s global platform, to innovate and develop servicing solutions across a broad spectrum of asset classes. The Guernsey funds industry as a whole continues to demonstrate a forward-thinking vision and a commitment to upholding its world-class financial centre status.’

Among professional firms, PricewaterhouseCoopers is the now largest auditor of Guernsey serviced funds, auditing 526 funds, narrowly ahead of KPMG with 494 funds, Ernst & Young with 242, Deloitte & Touche with 193 and PKF with 102.

John Roche, partner and investment management leader at PricewaterhouseCoopers in Guernsey, says: ‘I am delighted with the continued strong growth in the number of fund clients of the practice in Guernsey which puts us in a very strong position working with quality clients in the alternative investment fund arena, particularly private equity, real estate and funds of funds.’

Carey Olsen offers legal advice to 929 funds, with Ozannes in second place with 620, followed by Ogier (178), Collas Day (41) and Mourant du Feu & Jeune (30).

‘Each year we have managed to increase our market share steadily and this year we remain the undisputed leader in Guernsey by a significant margin,’ say Graham Hall, a corporate partner with Carey Olsen. ‘The results are a reflection of the commitment of our funds team, who have shown their ability to meet critical deadlines and work across international time zones.’

Ed Moisson, director of fiduciary operations at Lipper, says: ‘Despite the events of the past year, Guernsey continues to prosper as a fund servicing centre, with almost 2,000 funds and sub-funds now serviced on the island. Its reputation as a home for more specialist investments, such as private equity and funds of hedge funds, plays a significant part in Guernsey’s success.’

Private equity and venture capital funds grew by 32 per cent to USD114.0bn in fund assets domiciled on the island, according to Lipper. The next largest asset classes are funds of hedge funds with USD34.8bn and real estate funds with USD30.3bn.

‘These figures demonstrate the robustness of the Guernsey fund industry in what are challenging times for the global economy,’ says KPMG partner Neale Jehan. ‘KPMG is obviously delighted to be the auditor to half of the fund assets now domiciled in Guernsey which is a reflection of the continuing investment we are making in our funds team.’

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