Dextra, Ernst & Young and law firm Carey Olsen give their views on why Guernsey is an attractive hedge fund and funds of hedge fund jurisdiction.

Anne Ewing, co-founder, Dextra
Ewing spends her days focusing on funds’ corporate governance and believes this is an area which is receiving more attention. While she says “it’s done properly in Guernsey”, Ewing adds that the jurisdiction must keep up to speed with regulatory changes on the corporate governance front. “We know that the success of a fund relies so heavily on what the service providers do for it,” she says.
Ewing believes hedge fund directors need specialist knowledge to do their jobs. Although she says it is impossible to put a limit on the number of funds a director can manage, Ewing notes: “If you were to sit on a very active set of funds you could be very busy with half a dozen.”

Michael Bane, partner, Ernst & Young
 “The industry we have on the island is different from what we had 15 years ago,” says Bane. He points to developments such as the increase in fund managers moving elements of their business to Guernsey as an example. “That’s great news for the island and it’s an encouraging opportunity,” Bane believes. He says Guernsey’s products and structures such as protected cell companies are now well-established. “Particularly the closed-ended listed type product seems to be going from strength to strength,” he says. Bane predicts a resurgence in popularity for listed funds as markets recover and trading discounts begin to narrow again. Overall he is positive about Guernsey’s outlook. “In the industry there’s a huge amount of knowledge, skill and experience. That’s hard to compete with,” Bane concludes.

Ben Morgan, partner, Carey Olsen
Morgan believes Guernsey is moving out of a period where its hedge funds and funds of hedge funds were restructuring into one of growth. He notes a “pick-up across the alternative spectrum” but adds it is difficult to gauge exactly how much activity has grown. Morgan thinks funds of hedge funds, always Guernsey’s niche, will remain popular. “The big reason for funds of funds being done in Guernsey is that the custody can be done in Guernsey,” he notes. Guernsey’s advantage is its strong service provision industry, says Morgan. “Fund promoters want to be able to sell the fund and they want the operations to be robust. Managers are only concerned about something not being done properly when something goes wrong,” he says.