Guernsey leads in fund administration, bank deposits fall
More UK-based managers have their funds domiciled and administered in Guernsey than any other jurisdiction, according a survey by Fund Domiciles.com.
However, figures from the Guernsey Financial Services Commission also show the value of deposits in Guernsey’s banks falling.
In a representative sample of 50 UK-based alternative investment fund managers, 24% had their funds domiciled in Guernsey compared with 21% in the UK, 18% in Jersey, 12% in Cayman and 9% in Luxembourg. 24% of managers have their funds serviced from Guernsey, followed by 20% from the UK, 18% Ireland and 16% Jersey. These results reflect Guernsey’s move up to third position in the Fund Domiciles.com Stability Index 2011.
Peter Niven, chief executive of Guernsey Finance – the promotional agency for the island’s finance industry, said: “The results of this survey show that significant numbers of managers continue to choose to use Guernsey as a fund domicile and in particular, the Island is considered the jurisdiction of choice for private equity.”
Nobody interviewed for Fund Domicles.com’s survey, The Future of the UK Offshore Domiciles, reported that they would be redomiciling funds to the UK due to the EU’s AIFM directive.
Meanwhile statistics from the Guernsey Financial Services Commission (GFSC), show that the value of deposits held by banks licensed in Guernsey fell £6.8bn (5.8%) during the final quarter of last year to reach £107.5bn at the end of 2011. This represents a fall of £3.4bn (3.1%) year on year.
The GFSC report attributed the fall partly to currency movements but also added that there was a material decrease in deposits.
No new banking licences were issued during the quarter, while Bank Sarasin and Yorkshire Guernsey surrendered their licences, taking the total number of licensed banks in Guernsey to 35.
Niven said: “What we can see is that these figures are a continuation of a longer term trend. The number of banks licensed in Guernsey reached its peak of 79 in the late 90s and early years of the new millennium but since then amalgamations, reorganisations and consolidations have seen it steadily fall to 35 at the end of 2011.
“During that time we have also seen the value of deposits rise from £77bn at the end of 2001 to a high of £157bn at the end of 2008 but since the onset of the financial crisis and the unprecedented low interest rate environment we have seen the value of deposits fall to £107.5bn at the end of last year.”