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Dr Andy Sloan, Acting Director of Strategy at
Guernsey Finance, writes for Funds Europe magazine's
'Association Column' on Guernsey's global distribution
capabilities.
It is the Guernsey view that mutual recognition of funds regimes
is the future for global distribution and administration. As a
global leader in alternative funds servicing, we intend to be at
the forefront of the drive to leverage mutual recognition to
deliver more cost-effective, capable solutions for global
managers.
But against that "future think" backdrop, it is easy
to lose sight of today's basics of meeting the requirements of
managers and investors.
From the perspective of our "rock", it is easy to take
for granted the basic building blocks of the scale of the stability
and substance of the Guernsey service offer. Attributes that
managers are increasingly valuing in uncertain times.
Guernsey has long been recognised as a provider of strength and
security in alternative asset administration. That strength has led
to dominance in private equity and infrastructure administration
and a specialism in alternative asset servicing. That strength and
specialism is increasingly being leveraged by service providers
catering to the growth in multiple alternative asset strategies
across all client types – a trend labelled as a "move to
multi alt" by PwC in its recent "Asset Management
2025" publication.
The further trend we see clearly from the perspective of a third
country jurisdiction off the coast of northern France is a major
pivot by managers seeking to accommodate the more globalised
distribution patterns developing in a "pre-post" Brexit
environment.
These factors are combining with managers placing increasing
value on the strength of Guernsey's global distribution network
– to all four corners of the globe – developed through
agreements and equivalences built up over decades of commitment to
international engagement and standards. Allied to our proven NPPR
route – the faster, cheaper alternative to the passport,
reaching the parts of the EU investor base managers need to reach
– this creates a powerful distribution node to London, EU27
and the rest of the world for managers as Brexit catalyses reviews
of their distribution needs.
More than two-thirds of Guernsey alternative funds comprise
investors from two or more regions globally, and it is here,
pivoting to rest of world distribution, where we see a "super
trend" developing pre-post Brexit. This trend particularly is
leading to a greater appreciation of the supportive role the
Channel Islands play to London-based managers, part of our
symbiotic relationship with the city.
Right now, managers are being resolute in their focus on
stability and substance. Increasingly sophisticated service,
flexible, competitive product, and four corners of the globe
distribution is now the de minimis offer.
The Guernsey Funds Masterclass in London in February saw
panellists outline how they felt concerns over costs and regulation
of UCITS in Europe were driving managers to consider setting up
duplicate structures outside of Europe.
Some managers now are seeing clients in Asia, Australia,
Switzerland and the US considering options other than UCITS, which
was not happening just a few years ago.
A convergence of these secular trends is driving a movement
towards global passporting, or at least a global template based on
mutual recognition to draw together the numerous regional passport
initiatives and drive efficiency and lower costs. Brexit is likely
to accelerate that journey, and Guernsey's distribution ability
sees the island well-placed.
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