Managers continue to use Guernsey’s AIFMD private placement regime

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Figures from the Guernsey Financial Services Commission (GFSC) show that, as at 31 January 2015, 46 Guernsey Alternative Investment Fund Managers (AIFMs) have used Guernsey’s National Private Placement (NPP) regime to market Alternative Investment Funds (AIFs) into Europe.

The figures, which solely reflect marketing into Europe by Guernsey AIFMs and do not include European Economic Area (EEA) AIFMs, reveal that the 46 managers promote investment funds into one or more EEA Member States. These cover 15 of the 27 jurisdictions with whom Guernsey signed bilateral cooperation agreements in July 2013 ahead of the Alternative Investment Fund Managers Directive (AIFMD) coming into force. The UK remains a key market for Guernsey managers with 56 AIFs being marketed there.

Managers also market AIFs into other key markets such as Germany, France, Ireland, the Netherlands, Sweden, Norway and Finland as well as Belgium, Denmark, Austria, Luxembourg, Estonia, Portugal and Romania.

Sinead Leddy, Head of Technical at Guernsey Finance, the promotional agency for the Island’s finance industry, said: “From the outset, Guernsey’s response to AIFMD has been second-to-none, ensuring it is ideally placed to continue to provide access to Europe. The statistics show that NPP from Guernsey is being used to target the key countries which promoters wish to market into. A fund typically markets in between two to four countries and NPP is the ideal approach for this model.”

In response to AIFMD, Guernsey introduced a dual regulatory regime through which it is possible to continue to distribute Guernsey funds into both EU and non-EU countries: the existing regime remains for those investors and managers not requiring an AIFMD fund, including those using EU National Private Placement (NPP) regimes and those marketing to non-EU investors; and there is an opt-in regime which is fully AIFMD compliant.

Guernsey’s opt-in equivalent regime which has been in place since January 2014 is appropriate for funds requiring full AIFMD compliance. However, Guernsey’s position as a third country means our managers and funds who want to access Europe continue to be able to use NPP regimes.

As a domicile for alternative and particularly private equity funds, Guernsey offers a variety of potential fund structures with differing levels of flexibility and regulatory requirements depending on the appropriate vehicle for a particular project.

Ms Leddy said: “We continue to hear positive feedback from promoters and their advisers that Guernsey’s regulatory environment is straightforward and, more importantly, things can progress in a timely manner. The turn-around times in Guernsey are held to be low compared with those of our competitor territories where delayed applications can cause issues when bringing a new product to market.”