Guernsey: Most improved fund domicile

Arrow_up_2Guernsey registered its biggest leap in a ranking of fund domiciles, jumping to third position from sixth place. Luxembourg and Malta held the same positions as last year, first and second respectively.

According to Fund, the data provider that provided the ranking according to its Stabiility Index, Guernsey showed the most improvement as a jurisdiction. "Statistics show that Guernsey’s fund industry did well last year – particularly relative to other jurisdictions. Many of the specialist alternative funds that are attracted to a location like Guernsey are performing strongly at the moment and if investors continue to want to allocate to schemes that seek returns which are uncorrelated to equity markets, then this domicile should continue to prosper," the data provider said.

Peter Niven, chief executive of Guernsey Finance, a promotions agency, said: “This improved ranking underlines the general positive buzz and optimism that we are seeing around Guernsey’s investment fund business at present. It is a reflection on Guernsey’s professional practitioners and the infrastructure that has been established for investment funds which is finding favour with fund managers.”

Guernsey saw the value of investment fund business grow by £6.2bn (€7bn) (2.4%) during the first quarter of this year, to a new record high of £263.6bn – a rise of £66.2bn since March 2010.

Rankings for the Stability Index are calculated upon a combination of macro-economic and fiscal data, as well as fund flow statistics. Of the index score, 50% is based upon data that could impact the financial stability and competitiveness of the domicile, including the strength of the jurisdiction’s finances; particularly its overall fiscal position, GDP and inflation rates. The other half of the score is based on size and percentage increase or decrease in fund flow data, with provision made for topicality of the statistics.

The data provider said that Luxembourg once again came out as the most stable international fund domicile. "Its economy had a relatively strong year in 2010 and its fund flow data for the year was impressive," it said.

Malta kept its second place because its economy came through the credit crunch and market crisis remarkably unscathed. The stability of its financial institutions was the chief reason why the island scored so well in the index.

©2011 funds europe