According to Damien Fitzgerald, head of funds for Guernsey at Zedra, the Channel Islands are poised to compete with Luxembourg and other domiciles as a centre for funds and fund services, based in part on speed to market.
Fitzgerald asserts that the region's adaptability makes it an increasingly viable centre for private funds and alternative funds.
He emphasises that the Channel Islands support cryptocurrencies, as seen by the creation of a bitcoin ETF in Guernsey earlier in 2022, as well as sustainable investments, such as solar panel and forestry asset classes.
Fitzgerald added: “The regulatory landscape in place allows to establish the appropriate structures and bring them to market quicker than other regions.“
It’s also easier for a first-time manager without a track record to get funding, and that drives innovation too.”
Last year, the Guernsey Financial Services Commission recorded a 23.7% year-over-year growth in the net asset value of Guernsey funds, bringing them for the first time above £300 billion.
Jersey was also a popular site for alternative investment funds, with total net assets of £450 billion.
According to the Luxembourg fund organisation Alfi, however, Luxembourg's assets under management reached €5.9 trillion by the end of 2021. Private equity and venture capital had the greatest asset growth in the Channel Islands, increasing by 27% annually.
Fitzgerald argues that the Channel Islands have several advantages over other domiciles, such as being European but not a member of the EU, and despite adhering to the EU's Alternative Investment Fund Managers Directive, Guernsey and Jersey are not signatories and can therefore avoid some of the higher costs that he claims Luxembourg's private funds incur.
By fLEXI tEAM