Guernsey eyes new business despite redemptions

Guernsey has signed Tax Information Exchange Agreements (TIEAs) with Japan and Poland bringing its total number of TIEAs to 31, although recent statistics show investment in the island’s fund business dropped in the third quarter of 2011.

According to Fiona Le Poidevin, deputy chief executive of Guernsey Finance, each TIEA is “a step forward in developing relationships between two jurisdictions,” she said. 

“It is important that these agreements are aligned to the broader strategy for attracting business from emerging markets, such as the Far East and Eastern Europe,” Le Poidevin added.

Guernsey has upped efforts to establish links with the emerging markets in recent months.

A delegation from the island led by Carla McNulty Bauer, minister of the Commerce and Employment Department, visited Hong Kong in November to promote the island’s investment funds and capital markets.

Hong Kong was followed by a visit to Singapore and the trip concluded with a visit to Shenzhen, China.

On December 1 it was announced Guernsey’s financial services regulator, the Guernsey Financial Services Commission (GFSC), had signed a statement of cooperation with the China Banking Regulatory Commission (CBRC).

Guernsey’s burgeoning relationship with Asia and the emerging markets is perhaps one of necessity as recently released figures demonstrate the value of the investment fund business in Guernsey fell by £3.4bn (€4bn or 1.2%) during the third quarter of 2011.

This decrease takes the net asset value of funds under management and administration in the island to £271.1bn (€318bn) at the end of September 2011. This still represents a rise of £27.9 billion (€33bn or 11.5%) compared to the end of September 2010.

According to Peter Niven (pictured), chief executive of Guernsey Finance, “from the initial crisis point of 2008 we have seen the improving markets conditions reflected through a steady and sustained recovery in the Guernsey funds business.”

“However, the ongoing uncertainty surrounding the eurozone has led to a loss of market confidence and this appears to have adversely impacted the total value of funds being managed and administered in the island,” Niven said.

He added that certain alternative asset classes, such as film, dispute resolution and renewable energy, are still attracting attention. “This is the area where we continue to see the greatest number of new fund launches, although the pressure on our historic introducer community in the established markets of the UK and Europe is providing even greater reason for us to try and attract new business from further afield.”

“Indeed, the emerging markets have been a significant focus of our activity during the last quarter and will remain a high priority in 2012,” Niven commented.

The next TIEA to be signed is expected to take place on December 20 with India.

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