Guernsey Eyes Change To Private Investment Fund Regime

Editorial Staff 10 December 2020


Introduced in Guernsey in November 2016, the entity has been used by new and existing fund promoters. Such structures are examples of how IFCs around the world seek to encourage investors and businesses.

Guernsey has announced that it wants to tweak its Private Investment Fund structure, scrapping the need for manager involvement and hopefully sharpening the jurisdiction’s appeal.

Introduced in Guernsey in November 2016, the entity has been used by new and existing fund promoters. With a PIF, the fund manager makes declarations over prospective investors’ ability to sustain losses, the maximum number of investors, and the completeness and accuracy of the application.  Now it is proposed that the fund administrator is responsible for these confirmations, and a PIF can be created without a fund manager licensed under Guernsey’s Protection of Investors Law, removing the need to make a related PoI licence application, and reduce costs.

Alongside the existing PIF model, two new routes are introduced removing the manager requirement: 

Firstly, an alternative for qualifying investors only, with qualifying investors clearly defined; and secondly, a “truly private structure” for family relationships only, reflecting Guernsey’s position as a jurisdiction for family office structuring.   

This week Guernsey also opened consultations on proposed changes to its non-Guernsey scheme regime, to move away from the requirements for firms to seek prior regulatory approval to administer non-Guernsey schemes, to a de facto notification regime which will require only reporting to be provided via licensees’ annual returns.   

There is a constant competitive process among IFCs introducing new structures to encourage funds, family offices, businesses and other entities. In Singapore, to take an example from Asia, the city-state in January unveiled its Variable Capital Company structure, designed to encourage wealth managers to set up in the IFC.

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