Personalities from the hedge funds industry talk about Gibraltar as a jurisdiction, looking at its advantages and prospects.

Désirée McHard, managing director, BDO
For McHard the biggest hurdle to significant fast-track growth of the jurisdiction is the lack of a large fund administrator like Citco. While she believes having Capita in Gibraltar will bring benefits, she says there is a need to spread the word to a much larger audience – something a big-name administrator would do. “We need to get the word out that we are a serious fund jurisdiction,” she comments. McHard believes the main advantages of Gibraltar are its onshore location and EU membership. She also expects benefits to flow to Gibraltar following the introduction of Ucits IV. She sees this as the future and a real benefit for the jurisdiction. The industry is in close contact with the regulator looking at ways to ensure early adoption of Ucits IV. Another area she thinks may give Gibraltar an edge over other EU jurisdictions is if it can start attracting Shariah compliant products and particularly alternatives and hedge funds. She points to the multicultural nature of Gibraltar’s society. “This is an advantage when looking to attract Islamic products or ethical investment products in general,” she concludes.

Joey Garcia, senior associate, Isolas
Gibraltar is not proactive enough as a jurisdiction, says Garcia. “We are not on the radar as much as we should be,” he says. Gibraltar needs to promote the jurisdiction as a package including things like re-domiciling, prospectuses for schools and the lifestyle to expect. “We have an advantage with our situation and climate. We offer tax benefits,” notes Garcia. He believes high-income managers may be tempted to come to Gibraltar, particularly from a higher-taxed London location, if they know what is available. He points to the territory’s English-speaking population and common law as other plus points. He believes the future is going to be positive for the jurisdiction, particularly with the introduction of Ucits IV. “There is a big effort to gear up for Ucits IV, especially the biggest change which will be the domicile of the fund not being the same as the management company. Through Ucits IV, funds can make use of the master/feeder or similar structures. And Gibraltar offers quick redomiciling as well as passporting throughout the EU for the management company,” he concludes.

Kristian Menez, senior manager, assurance, PricewaterhouseCoopers
Gibraltar is “very well placed” believes Menez. He points to the flexible fund vehicles available, particularly experienced investor funds (EIFs) and protected cell companies, which have been used to good effect as an umbrella fund allowing different types of strategies in one structure. “It is a creative structure and one of the more innovative,” he says. Like McHard, he sees a future for Shariah compliant products. “Geographically we are part way between the Middle East and Europe. We are multicultural and generally welcoming to people coming into Gibraltar. There is potential for growth in this area,” he says. In addition Menez says there is potential growth, pointing to the expertise and experience of professional services present in the jurisdiction. However he, like Garcia, says Gibraltar needs to “get the message out there” that it is a jurisdiction open for business and welcoming to the hedge fund industry.

Moe Cohen, director, Benady Cohen
Cohen points to EU membership as one of the biggest plus points for the jurisdiction. He thinks because Gibraltar is still growing and flexible in its approach, it has the ability to offer more personalised and cost-effective services to funds. For funds looking to establish a track record in the EU, he believes Gibraltar is an obvious choice. “Funds benefit from the way the regulator in Gibraltar is responsive and open to consider innovation and offer solutions,” says Cohen. He wants to see the experienced investor fund product base expanded with the ability to attract other types of investors. Cohen wants to see a more diversified product offering moving away from white label private placements. He sees possibilities in the introduction of Ucits IV. “The combination of a proactive fund industry association and support the government provides, together with a responsible regulator, should equal success for Gibraltar,” declares Cohen.

Adrian Hogg, director, Grant Thornton
Hogg believes Gibraltar’s push into Islamic finance is well timed. He says Gibraltar’s structures are responsive to Shariah procedures and sees no problems in following mandates that follow these strictures. He says having Shariah products is just “one more string to the bow” of what Gibraltar can offer and sees no impediments to introducing more of the same. He points out that legislation is already flexible enough within the experienced investor fund to accommodate Shariah compliant products, although some tweaks to the finer details may be needed. Looking at the European market, Hogg says his company is seeing a lot more managers, particularly from Switzerland and London, looking twice at Gibraltar. He believes they are looking at the options of where they can be based. Hogg says Gibraltar offers an ideal package, pointing to the leisure and lifestyle attractions available across the border in Spain.

Karthik Iyer, managing director, Capita Financial Administrators
For Iyer, Gibraltar is a niche market and is still emerging as a hedge fund jurisdiction. While the territory has solid governance and a good regulatory foundation, he says it is still at an early stage in its development. Gibraltar, says Iyer, offers a cost-effective alternative within the EU but in a common law environment. Other advantages, he says, are its low tax, accessibility (it is not an island) and culture which spans several different ethnic backgrounds. At a time when investors are demanding increased transparency, Iyer believes Gibraltar offers both good governance and high-quality services. Like others, he believes the industry needs to work harder to get the jurisdiction known to a larger client base.

Michael Harvey, director, KPMG
“The industry has moved on and is now pulling together actively to try to develop the fund industry,” declares Harvey. The fund industry in Gibraltar is “getting its act together” and is more organised in how it approaches government as well as promoting itself outside the territory. Like others he sees the experienced investor fund (EIF) as a flexible and solid fund vehicle. The EIF together with the protected cell company legislation offers a flexible, niche product to the industry. While he concedes the jurisdiction “still has a long way to go” he believes it is capable of being a competitive domicile in Europe. Although it is physically small, he believes Gibraltar offers value for money coupled with quality services. “There are definitely opportunities for expansion,” concludes Harvey.