The decision of Investec Asset Management to re-domicile a $1.2 billion (€1 billion) fund of funds unit trust from Ireland to Guernsey has been hailed as a “huge vote of confidence” by
Guernsey Finance, the promotional agency for the island’s finance industry.
Dominic Wheatley, chief executive of Guernsey Finance, says the choice to migrate Investec International Funds to Guernsey earlier this year was motivated by the island’s dual regulatory regime for the Alternative Investment Fund Managers Directive (AIFMD), and recent figures show other funds following suit.
The island’s financial services regulator has reported a total of 140 new funds during the 12 months to the end of September, raising the total number of funds currently approved for domiciling or servicing in Guernsey to 1,125.
Guernsey’s system makes it possible to distribute funds into both EU and non-EU countries, offering the choice of a new opt-in regime that is AIFMD compliant, or an existing regime for those not requiring an AIFMD fund.
Wheatley says that there is evidence of funds also moving to Guernsey from the Cayman Islands to take advantage of the national private placement regime for distribution into the EU.
Figures from the Guernsey Financial Services Commission (GFSC) show that 30 new funds were approved during the fourth quarter of 2013, 26 in the first quarter of 2014 and 42 during both the second and third quarters of this year.
Vic Holmes, chairman of the Guernsey Investment Fund Association (GIFA), says that the introduction of the AIFMD has encouraged promoters to recognise the advantage of Guernsey’s ability to distribute funds into both European and non-European jurisdictions.
“Overall, Guernsey’s funds sector is in a stable position. We’ve seen growth in the number of new funds and a positive response to our regime under AIFMD,” he says.
Holmes adds that the GIFA is engaged in the European Securities and Markets Authority’s consultation on whether or not AIFMD passports should be extended to third countries, and aims to ensure that Guernsey is part of the first wave of approved jurisdictions if third-party passports come into effect next year.
Despite the Investec fund migration, the Irish Funds Industry Association (IFIA) recently announced record net assets of €1.6 trillion in Irish funds, across all fund structures, in 2014.
Investec had not responded to requests for comment by press time.
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