Guernsey: The Power Of Guernsey's Global Distribution - Supporting International Investors And The City

Last Updated: 20 February 2018
Article by Andy Sloan

Most Read Contributor in Guernsey, July 2019

Dr Andy Sloan, Acting Director of Strategy at Guernsey Finance, says that Guernsey's strength in fund products and distribution has a significant role to play in supporting the UK funds sector to pivot towards a "rest of the world" trade strategy.

"The opportunities for future trade liberalisation and regulatory co-operation are key." Not my words but those of the UK's Investment Association. It is a narrative that we in Guernsey fully endorse and it's driving many current developments in fund servicing and distribution. Indeed, following our efforts last year, we're now looking to provide further support to mutual recognition initiatives, and help drive forward regulatory harmonisation and cost reduction for the global fund industry.

A traditional marketing point for Guernsey has been the superiority of our specialist service offer. Lesser-recognised perhaps is the strong distribution capability for funds through existing agreements and equivalences across non-EU jurisdictions, a strength built up through decades of commitment to international co-operation.

In the meantime, what is also key in the current Brexit-fuelled trading environment is supporting investment managers with a UK nexus to pivot their business models to a more "rest of the world" focus. A current focus of the Guernsey Investment Fund Association's technical committee is Guernsey's excellence in service and global distribution, and how this could be put to better use supporting British funds and managers with the UK strategy to pivot its trading to the rest of world. We're seeing our position as a complementary centre to the UK asset management industry gaining greatly in appreciation among senior industry figures as a result.

I was reminded of this point when the FT quoted industry figures suggesting about £1 trillion in assets could be repatriated by the UK investment management industry if HMRC would waive the tax charge on restructuring. A more practical route would be to reinstate recognition of open-ended Channel Island schemes under section 272 of FSMA, which was removed when the UK transposed AIFMD. Practical because the Channel Islands are complements, not competitors, to the City in this space.

What I thought most interesting about the Luxembourg story was the fact that £1 billion of Luxembourg funds were effectively single domicile funds for British investors. I have always thought it a bit of a myth that the Luxembourg funds industry was the preserve of pure multi-domicile funds, and had suspected that a large proportion of Lux assets would be plain vanilla single-domicile funds. The billion figure from the Brits lends itself to a situation where if a similar circumstance applied to German and French funds it could be easily the case that single-domicile funds could account for as much as half of total assets. 

It has become a default option to park assets in Luxembourg on the assumption that it's a cost-effective distributional hub and the marketing of this point has been highly successful. Yet the actuality is probably a little more complicated than that. I was present at the ALFI funds forum in 2016 when Deloitte and Fundsquare presented research which suggested that a single hub distribution model was not of itself more cost-effective than a multi-market model. 

It's analogous to the marketing facts that passporting is a cheaper, more effective option under AIFMD.  Anecdotal evidence, and some major industry associations, such as the BVCA, suggest it's not. In many cases it's multiple private placement. The European Commission knows there are cost issues with cross-border distribution in Europe, which is why it's incorporated a review of costs of cross-border distribution into its Capital Markets Union programme.

The major irony being that in any event, there is little demand for major multi-market capability, even in the EU context. The real demand is for fast, flexible product that can be exploited across several markets spanning several global regions. It is no accident that more than 70% of Guernsey alternative asset funds comprise investors from two or more regions. And it's here, pivoting to ROW multi-market distribution that, where we see a real trend developing post-Brexit and where Guernsey product can help the UK asset management industry compete against its EU competitors.

Back in 2014, Guernsey's contribution to the "Channel Islands value to the UK economy" campaign was to publish research that demonstrated not just the economic value of the investments routed into the UK and EU through the islands, but the fees flowing to UK professional service firms from Channel Islands-administered assets. The figure was about £1 billion back in 2014. It is estimated that UK professional services firms earn three to four times more from Guernsey structures than from managing assets administered in Luxembourg.

London and the Channel Islands' funds centres have a symbiotic relationship. The UK's intention to emerge from Brexit as a more free and vibrant financial trading hub is key for the islands, while we will play a key role in supporting and complementing the City's efforts.

In future years that may well be through the global funds recognition template that we see as likely developing with time. At this point it's a case of Guernsey providing a complementary, flexible, cost-effective product with powerful distribution, as capital flows pivot to accommodate more globalised investment patterns in a post-Brexit environment.

For more information about Guernsey's finance industry please visit

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions