The ‘Manager Led Product’ – a solution for alternative managers inside and outside the EU – was warmly received by a London audience when unveiled at the Guernsey Funds Forum recently.
Nearly 500 delegates were in attendance at the recent Guernsey Funds Forum to hear about the launch of the island’s new Manager Led Product (MLP).
Guernsey Finance Chief Executive Dominic Wheatley said the London showcase was the perfect setting to announce the immediate launch of the MLP, which aims to ensure a proportionate risk-based level of product regulation for any Alternative Investment Fund Manager (AIFM) that establishes itself in Guernsey and seeks to market into Europe under the National Private Placement Regime arrangements.
Mr Wheatley told the audience that the MLP would place the regulations on the AIFM only and respond to the same market pressures that have given rise to Luxembourg’s RAIFs and Malta’s NAIFs, allowing appropriate derogation of AIFMD rules and facilitating streamlined and more efficient fund formation processes.
“However, MLPs go further than both NAIFs and RAIFs in allowing regulatory efficiencies for managers housing several funds in Guernsey, whilst maintaining appropriate segregation, thereby nullifying contagion risk,” said Mr Wheatley.
“We see the MLP as offering a very attractive vehicle for managers needing substance in the island, an area in which we expect to grow. Once an AIFM has been licensed by the Guernsey Financial Services Commission, they will then be able to launch new partnership structures and corporate funds by simple notification.
“Capital will be concentrated at the AIFM level. This will facilitate the quick and efficient launch of new funds with a minimum requirement for red tape but with no diminution of the quality of regulatory oversight.
“The principles underlying this product will ultimately produce a separate regime for non-AIFMD managers marketing outside of Europe. We see this as very much the first of a number of developments based on a similar theme of moving the focus of regulation to facilitate greater ease of doing business and speed to market without compromising on regulatory standards. It demonstrates not only our ability to develop and implement creative solutions quickly but also the way that industry and regulator work together to ensure that such developments are effective and practical.”
In addition to the launch of the MLP, the event included two panel sessions and a keynote speech from Luke Johnson, Chairman of private equity house Risk Capital Partners and former Chairman of Channel 4 Television.
The entrepreneur, one of Britain’s leading businessmen, told the audience that private equity remained a “seller’s market” with a “huge weight of money to be invested”.
He said Guernsey’s private equity industry had played a part in raising or administering a large proportion of these funds, while the fundraising climate seemed as good as it had ever been.
“There’s obviously been a big comeback of banks and bonds and so forth, willing to lend to private equity deals, which is good for the industry, as long as people don’t get overexcited. There is this growing appetite, amongst many different institutional investor types, to become Limited Partners and to invest in this asset class, from more and more pension funds to sovereign wealth funds and so forth. I think that the expansion of the alternative asset class is great news. I think it’s good news for Britain, because we are a world player and it’s obviously good news for Guernsey.”
The Guernsey Funds Forum was hosted by Guernsey Finance in conjunction with the Guernsey Investment Fund Association (GIFA).
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