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Guernsey funds “resilient” in the face of global market turmoil

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The adverse performance of the global markets is the primary reason that the value of Guernsey funds fell by GBP1bn (0.5 per cent) during the final quarter of last year, according to Gu

The adverse performance of the global markets is the primary reason that the value of Guernsey funds fell by GBP1bn (0.5 per cent) during the final quarter of last year, according to Guernsey Finance. 

This change took the total value of funds under management and administration to GBP200.4bn at the end of 2008. It represents an increase of GBP22.2bn (12.5 per cent) year on year.

Peter Niven, chief executive of Guernsey Finance, the promotional agency for the island’s finance industry, says: ‘Global market conditions meant it was inevitable that we would see an overall reduction in the value of our business during the fourth quarter. We were fortunate that it was only a decrease of 0.5 per cent and this demonstrates the resilience of our funds sector but clearly there will be further falls until market confidence returns, which is unlikely to be before the end of 2009.’

Guernsey open-ended funds fell in value by GBP2.1bn (3.2 per cent) over the quarter to reach GBP63.6bn at the end of the year – a decrease of GBP5.6bn (8.1 per cent) since the end of December 2007.

The Guernsey closed-end fund sector grew by GBP5.6bn (6.5 per cent) over the quarter to reach GBP91.5bn at the end of December 2008 – up GBP15.1bn (19.8 per cent) from 12 months previously.

Non-Guernsey schemes, for which some aspect of management and administration is carried out in the island, decreased by GBP4.5bn (nine per cent) over the quarter to GBP45.3bn. This figure is an increase of GBP12.7bn (39 per cent) since 31 December 2007.

Niven adds: ‘We may have seen an overall decrease in asset values but in fact looking more closely you can see that there is continue growth in the closed-ended sector. This is where the principal strength of our business is now and the area that we are most heavily marketing and promoting Guernsey as a funds jurisdiction.’
 
In recent months the island has made several legislative amendments related to funds business and introduced a new set of fund rules.

The main result is that now both Guernsey open and closed-ended funds can be established as authorised or registered funds. Authorised funds are regulated by the Guernsey Financial Services Commission (GFSC) and subject to closer supervision than registered schemes, which are not authorised by the GFSC.

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