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Guernsey follows Luxembourg with fall in assets

Assets fallGuernsey, one of the Channel Islands with a long-standing investor services industry, saw the amount of assets either managed or administrated on the island fall by £8 billion (€9.1 billion) during the first quarter of the year.

Assets fell by 2.9% to stand at £262.5 billion – though the island’s funds trade body, Guernsey Finance, said the trajectory of asset levels was positive, with £40 billion of growth in the last three years.

The fall mirrors Europe’s largest fund centre, Luxembourg, where between January and the end of March assets fell from €4.214 trillion to €4.148 trillion.

Ireland’s funds industry saw growth over the same timeframe, though comparatively modest compared to previous months. At the end of February total assets in Ireland were €2.415 trillion, compared to €2.396 trillion at the end of 2017.

Volatility in markets likely hit funds in Luxembourg and Ireland where many liquid Ucits equity funds are domiciled, though in Guernsey – where investments are usually in less liquid alternative assets – the decline was led by the winding up of non-Guernsey schemes. These are funds not domiciled on the island but with some aspect of management, administration or custody carried out locally, and the fall in assets from these vehicles amounted to £7.6 billion.

Guernsey Finance remained positive, saying there had been an increase in applications for new funds, with a year-on-year rise to more than 110 made in the six months to the end of the first quarter.

Dominic Wheatley, Guernsey Finance chief executive, said that work was being done that will “bear fruit in the future”.

The island recently announced a proposal to introduce a green investment fund product and implemented a measure by the Guernsey Financial Services Commission to increase take-up of the island’s Private Investment Fund structure.

Wheatley said: “The longer-term trend over the last three years shows we are on the right track and Guernsey funds are in a healthy and positive position. We remain a stable jurisdiction of substance able to offer solutions to the uncertainty of Brexit.”

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