Guernsey Funds Value Increases

by Amanda Banks, Tax-News.com, London

Wednesday, March 10, 2010

End of year figures released on March 8, by Guernsey Finance – the promotional agency for the island’s finance industry, show that the value of investment funds in Guernsey increased by GBP2.7bn (1.5%) during the final three months of last year.

The second successive quarter of growth takes the total value of funds business in the island to GBP184.2bn (USD278.6bn) at the end of December 2009. Despite late growth, over the full calendar year, total funds business declined by GBP16.2bn (8.1%) from end-2008.

“We can continue to be cautiously optimistic about our funds sector,” said Peter Niven, Chief Executive of Guernsey Finance. “Although we have seen overall business decline by some 8% during the last calendar year, it must be remembered that this comes in the wake of a severe global financial crisis.”

“Our performance has outstripped some of our closest competitors and the fact that we have had two consecutive quarters of growth to the end of the year points again to a slow climb out of the general trough of 2008/9.”

“Our funds industry is proving robust throughout changing economic conditions and this final quarter of growth represents a positive move forward. It is another step down a long road to recovery but with increasing confidence in the markets, we hope that this will continue through 2010.”

Guernsey domiciled closed-ended funds reached a net asset value of GBP85.4bn at the end of December, which was a rise of GBP4.3bn (5.3%) during the quarter but a decline of GBP6.1bn (6.7%) year on year.

The Guernsey open-ended sector was valued at GBP50.7bn by the end of the year – down GBP800mn (1.4%) during the final three months of 2009 and falling GBP12.9bn (20.3%) compared to twelve months ago.

Non-Guernsey schemes, where some aspect of management, administration or custody is carried out in the island, decreased by GBP800mn (1.6%) during quarter three to reach GBP48.1bn although this is GBP2.8bn (6.2%) higher than the value at the end of December 2008.

The figures issued also show that the gross asset value of all Guernsey funds reached GBP220.7bn at the end of December. This is a rise of GBP3.5bn (1.5%) from the end of September, which was the second quarter for reporting those gross figures.