Guernsey is home to a wide range of investment funds, from traditional retail funds through to those aimed at sophisticated or institutional investors. As at 31 December 2009, total funds under management and administration in Guernsey had reached a total of £136 billion.
The advantages of Guernsey as a fund jurisdiction include:
- A mature financial services sector
- Experienced professional legal and accounting infrastructure
- Well-established and wide-ranging fund administration across a range of asset classes
- Thorough and pragmatic regulation
- Straightforward application and authorisation process
- Tax-neutral environment for funds
- Internationally recognised jurisdiction
- Channel Islands Stock Exchange based in Guernsey
- Geographical proximity to London and continental Europe
- Outside the European Union
- London time-zone
- Availability of innovative corporate vehicles, namely protected and incorporated cell companies
It has been possible to set up protected cell companies (“PCCs”) in Guernsey since 1997. In 2006, incorporated cell companies (“ICCs”) were added to the range of products available. The PCC structure allows a fund manager to establish a PCC to which sub-funds can be added. The sub-funds are added as cells within the PCC through a simplified approval procedure, as and when the fund manager decides to add, for example, different asset classes. This agility has made the PCC structure particularly popular. ICCs are less well-used but of considerable benefit if there is a desire to ring-fence the assets of various cells.
Our specialists are well-versed in setting up PCCs and ICCs and can advise potential fund promoters on the advantages of these structures.
Guernsey fund investments encompass a wide range of asset classes, from traditional equity and bond funds through to hedge funds, private equity, property, structured products and latterly niche asset classes such as fine wine, art and timber.
Many Guernsey funds are listed on the Official List and Alternative Investment Market (“AIM”) of the London Stock Exchange. Local practitioners and service providers are experienced in these types of listed funds and their operation. Listed property funds, hedge funds and funds of funds have been very popular recently, particularly as fund managers seek to capture long-term capital to suit their investment profile, while still offering investors some form of liquidity.
For fund managers looking to list their fund on a “recognised exchange” in order to attract SIPP and SASS investors, or to qualify for REIT status but in a cost-effective and efficient manner, the Channel Islands Stock Exchange (“CISX”) provides the ideal forum.
How AO Hall Can Help
AO Hall is a specialist law firm with experience in structuring and launching a wide range of funds. AO Hall is a member of the Guernsey Investment Funds Association. We advise on all issues associated with investment funds and their establishment in Guernsey. We are also experienced in listing funds on the CISX, the London Stock Exchange Official List and AIM.
The Guernsey Financial Services Commission (“GFSC”) requires all Guernsey established funds to appoint a local administrator. Through our local contacts, AO Hall can recommend local fund administration companies. AO Hall is an independent law firm, which does not operate an associated fund administration business, and so is able to give objective and independent advice on the selection of fund administrators. We can also recommend sponsors for funds listing on the CISX and a trustee/custodian, where required.
Our corporate team has particular expertise and experience in preparing fund documentation to ensure compliance with regulatory requirements. We are able to help fund promoters with the GFSC application process, liaising with the GFSC and local administrators throughout. We have an excellent and well-established working relationship with the GFSC.
This Red Guide does not constitute legal advice and should not be relied upon as doing so. Specific advice should be sought in any particular case. If you have any questions arising out of this Red Guide or generally in relation to a corporate issue, please contact our corporate team on +44 (0)1481 723723, or by email at email@example.com. Members of our corporate team, together with their contact details, are listed on our website www.aohall.com.
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