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Guernsey and Jersey continue to attract funds

A staff reporter

30 January 2005

The number of funds in the offshore centres of Guernsey and Jersey have continued to increase in leaps and bounds, according to research from Fitzrovia International. Separate new encyclopaedias on each of the jurisdictions produced by Fitzrovia showed that growth in the funds industry has continued despite the difficult global investment conditions. The Jersey encyclopaedia revealed that total fund assets increased by $5.4bn over the year to 30 June, 2001, to reach $US79.6bn. The number of funds also grew slightly to 817 from 795. In Guernsey, the number of funds serviced increased by 14 per cent over the year, rising to 894 funds from 783. However, Guernsey did not avoid the depressed conditions altogether, recording a slight decrease in fund assets over the year. Guernsey Guernsey’s position as a centre for more specialised types of funds has been re-affirmed with the number of alternative investment funds serviced on the island growing from 12 to 30 funds, with a total of $788m of fund assets. There has also been a noticeable growth in funds of funds domiciled in Guernsey, with both the number and assets of these funds increasing by over 35%. Guernsey International Fund Managers (GIFM) administers $ 8.7bn of fund assets in Guernsey, thus retaining its position as the largest fund administrator, ahead of Credit Suisse & Helvetia Fund Administration ($ 6.9bn) and Management International ($5.6bn). GIFM also secured the second largest proportion of new administration business introduced over the past year ($911.6m in assets), behind Bisys Fund Services ($ 1,865.3m). Barings is the new largest custodian with $ 6.9bn assets under custody. Taking the largest proportion of new custody business introduced over the past year has helped Barings’ position. Credit Suisse ($4.8bn) and Royal Bank of Canada ($4.3bn) are the next largest custodians. "The growth in our custody business reflects the integrated business we provide for client groups appointing GIFM and significantly the growth of other custody appointments,” said Jeffrey Burton, chief executive of the Barings Financial Services Group on the island. “These include custody appointments from fund administration and trust companies who require our global capability with high levels of service. Another factor affecting Guernsey's custody profile has been the changes to the Class A scheme rules. This has seen a number of custody contracts move as an one-off event in 2001." KPMG has maintained its position as the largest auditor of Guernsey serviced funds, now auditing 326 funds. Together with second-placed PricewaterhouseCoopers (233 funds), these two firms audit over 75% of funds serviced in Guernsey. Ozannes has also maintained its leading position, providing legal advice to 408 funds. Carey Langlois is in second place (228 funds) and Collas Day has more than doubled the funds it advises to take third place (47 funds). "The ability of the island to compete depends upon the continued strength and depth of the professional infrastructure within the island and the manner of regulation by the Guernsey Financial Services Commission," said Peter Harwood, senior partner at Ozannes. Jersey Jersey's position as a centre for securitisation schemes has been re-affirmed with the near comprehensive coverage of Fitzrovia's Jersey Securitisation Encyclopaedia showing that 364 of these schemes were serviced in Jersey as at 30th June 2001. These schemes have maximum programme values of $635.3 billion. The largest administrator of all funds serviced on the Island is the Royal Bank of Canada, with US$ 15.8 billion assets under administration. Mourant & Co ($14.8bn) and Deutsche Bank International ($10.7bn) are second and third. Interestingly, of the new funds added to the report over the last year, Mourant & Co has taken the largest proportion, with 29 funds ($7.9bn assets) under administration. Royal Bank of Canada also ranks first for serviced fund assets under custody ($15.1bn), ahead of Deutsche Bank International ($13.1bn) and JP Morgan ($4.7bn). However, when looking just at domiciled funds, Deutsche Bank International has the largest market share for both funds under administration ($10.7bn) and funds under custody ($11.1bn). Among auditors, PricewaterhouseCoopers (PwC) audits 265 funds, ahead of Ernst & Young (206 funds). Notably it is Ernst & Young that has taken the larger proportion of new funds (23) added to the report over the past year (PwC added 12 funds). Finally, Mourant du Feu & Jeune is the legal adviser for the largest number of Jersey-serviced funds (480 funds). While Olsens have the largest proportion of new funds, they still rank fourth overall (109 funds) behind Bedell Cristin (367 funds) and Ogier & Le Masurier (232 funds). "The establishment of new funds in Jersey, particularly for institutional and professional investors, has continued at an encouraging rate. With the introduction of new fund categories next year, which will make the establishment process more straightforward and user-friendly, this will assist the industry in encouraging even more institutional business to the Island," said Andrew Dann, managing partner at Ernst & Young Jersey, said.