Gibraltar positions itself for funds industry growth
Gibraltar’s fund industry is being heavily promoted by the government’s Finance Centre, keen to ensure that the jurisdiction does not lose out on any market share come the implementation of the EU’s Alternative Investment Fund Managers Directive (AIFMD) this summer.
Gibraltar’s law makers and regulators say that it is ready for AIFMD with draft legislation in place which has gone through extensive consultation.
James Lasry, partner with local law firm Hassans, said that the AIFMD has divided the funds industry into European and non-European jurisdictions, “Which means we’ve been thrust from being one of a dozen fund jurisdictions in the world to being one of four jurisdictions – so the Directive will see us playing a big part.”
Lasry goes on to confirm that Gibraltar has implemented its AIFMD legislation “with all the flexibilities that the Directive allows.” This means it will gain from the transitional provisions which allow for the retention of its sub-threshold regime for funds that are under €100m.
While other fund specialisms are sought, Gibraltar expects that its basic fund regime will remain the Experienced Investor Fund (EIF). “These don’t have to comply on their own with the AIFMD provision provided they don’t go over the €100m threshold. But the EIF is the only vehicle in Europe you can set up without pre-authorisation from the regulator. With this we will be the jurisdiction which is quickest to market,” said Lasry.
This industry is also anticipating increased business from other European jurisdictions – notably Luxembourg – following AIFMD implementation as Lasry explains. “We wouldn’t call ourselves competitors to Luxembourg because it is so much larger than we are. But if you remember that Ireland came into being because Luxembourg was small too, and it couldn’t service all the demand.”
Lasry’s logic is that if a new wave of funds moves into Europe a certain percentage of those will consider a jurisdiction like Gibraltar because, as he insists, it is easy to do business with. “Funds of around €50m-€100m will come to us because they can’t get the proper attention in places like Luxembourg simply because there they have so much other work.”
Collective investment scheme managers and depositaries already in situ include Barclays Bank, Credit Suisse, Lloyds TSB, Lombard Odier Darier Hentsch Private Bank, SG Hambros, Turicurn Private Bank and Royal Bank of Scotland International (trading as NatWest).
Gibraltar Funds & Investments Association (GFIA) has recently published a new guide for fund companies looking to set up a base here. It is presented as a comprehensive overview of what investors, fund managers, lawyers, administrators, auditors and other fund practitioners need to know about Gibraltar’s industry and is aimed at both a local and an international audience. Fund structures and issues of regulation and taxation are covered as well as an explanation as to how Gibraltar is distinguishing itself from other jurisdictions, whilst remaining fully compliant within the EU framework.