By John P. Egan
Recent figures released by the Guernsey Financial Services Commission (GFSC) revealed that the island's fund sector declined by 3.7 percent during the final quarter of 2011, which equates to £10.2bn off the island's net asset value of funds under management and administration.
According to the GFSC report released this month, the uncertainty in the Euro zone and resulting disturbance in the international markets appear to have had a continued impact on Guernsey funds. This comes as the second successive quarterly drop in the value of the island funds business; however, it follows eight consecutive quarters of growth. The total value of funds under management and administration reached £261.4 billion at the end of 2011, which is a rise of £4 billion (1.6 percent) for the year since 31 December 2010.
From these overall figures, Guernsey domiciled open-ended funds decreased by £2.1 billion (-3.6 percent) over the quarter to £55.3 billion, which equates to a decrease of £2.6 billion (4.5 percent) over the year since 31 December 2010. The closed-ended sector decreased over the quarter, by £6.6 billion (-5.2 percent) to reach £119.1 billion. However this represents an increase of £9.6 billion (8.8 percent) over the year since 31 December 2010.
Peter Niven, the Chief Executive of Guernsey Finance, said in a news release by the GFSC that despite an overall depreciation the number of closed-ended schemes rose in the final quarter of last year. e cannot be complacent, he added. his is the time in the economic cycle when we need to be out in the market place promoting Guernsey as a funds domicile so that we are among the first tier of jurisdictions under consideration by managers and advisers when the general conditions are more suitable for doing business. /p>
A report published in February by the University of Oxford for the government of Guernsey, reviewed the island economic profile and assessed its future opportunities. hina and India are set to remain the powerhouses of growth, the report stated, lbeit not at the circa 10 percent per year scale experienced in the last decade. Expanding towards the emerging Eastern economies represents a significant opportunity for Guernsey. In an official response to the findings Niven said, This) highlights the importance of promoting Guernsey both in traditional and new markets. /p>
Speaking with Invest In, Niven said other offshore jurisdictions are experiencing similar trends in investment figures mainly due to the ailing Euro zone, however, he was positive about the Chinese market. was in Shanghai last month exploring a number of opportunities, he said. e are still very much bullish on the Chinese market and approaching it with a high level of optimism despite its reduction in GDP growth. /p>
Despite the recent declines, Guernsey officials argue that their jurisdiction remains one of the strongest offshore centres. Patrick Firth, Chairman of the Guernsey Investment Fund Association (GIFA), said in an official press release, arket conditions are far from ideal for business at the moment but nevertheless our funds sector has proved more robust than many of our competitors in recent years. It is therefore disappointing to see two consecutive quarters of contraction in the value of our funds business but this does show that we cannot take anything for granted and that we need to make sure that we are marketing Guernsey as strongly as possible to ensure our long term success. /p>
