The findings were revealed at Guernsey Finances’ annual industry update today.
Produced by Frontier Economics, the report outlines the role played by the island in helping to drive the UK economy and comes out at a key time as the UK enters a General Election year.
“Guernsey domiciled funds hold assets worth £57bn in the UK. That’s an absolutely enormous figure,” said Nick Fitzpatrick, Manager, Frontier Economics.
“To put that into context, that’s more than double the total cost of Crossrail, which opened in London a couple of years ago. It’s also larger than the multi-year cost of several headline flagship UK net zero projects including physical adaptation and carbon capture, which themselves are massive projects.”
As well as measuring the stock of investments, Frontier Economics measured the returns that are enjoyed by UK individual and institutional investors as a result of investing in Guernsey funds.
That was £7bn. annually.
“Guernsey based and Guernsey domiciled funds have several distinct advantages from a UK investing point of view. Most importantly, they offer a whole variety of diverse investment opportunities and easy low cost access to the global markets, which isn’t as easy from other jurisdictions, which is why UK investors are so attracted to Guernsey funds.”
That £57bn is split across different asset types, with the major ones being private equity, property and infrastructure, which combined account for 80%.
“Funds are supporting small and rapidly growing UK businesses and enterprises. They are investing in infrastructure such as green power generation assets and also facilitating upgrades to the housing stock. So they’re having a broad impact across the entire of the UK.”
He spoke about the social returns from these investments, for example the health benefits of improved housing.
Those have been calculated at £3.5bn a year.
One example was The NextEnergy Solar Fund, which has investments in 90 operating solar assets all across the UK.
“Not only is this Guernsey domiciled fund contributing to UK policy objectives of a resilient, low cost, low carbon energy sector, but it is also contributing to balance economic growth, also contributing to levelling off, and generating social returns more broadly.”
Pictured: Guernsey Finance Chief Executive Rupert Pleasant.
Guernsey Finance Chief Executive Rupert Pleasant began the event outlining how the organisation promoted and worked with industry in 2023.
“To uphold our well-earned reputation as a respected international finance centre, we must continue to promote and connect Guernsey in our chosen key markets.
“That remains of the utmost importance as the international marketplace becomes more and more saturated. We must ensure that Guernsey’s voice is heard over the noise of the crowd.”
He cited healthy growth for Guernsey Finance in 2023 – including an increase of 182% potential new business introductions to the financial services industry, a total of 1,840, as well as maintaining the agency’s digital reach at 8.7 million impressions.
Guernsey Finance’s Deputy Chief Executive Barnaby Molloy revealed new branding as the body drops its We Are Guernsey tag and returned to Guernsey Finance, with a new logo and new website.
Business development representatives from the UK, US, South Africa and the Middle East explained the current trends from their jurisdictions, with insights into possible areas of business development for Guernsey in 2024.
Guernsey Finance Chairman Lyndon Trott closed the event.
“Our industry is continually innovating and adapting in order to meet the opportunities and challenges of the future, including AI, climate change, demographic change, and the shifting sands of international politics,” he said.
“Through this change Guernsey offers stability. We are safe, secure, flexible and competitive. And through this change Guernsey continues to attract new business.
“2023 was by anyone’s standards a tumultuous year. Some numbers are worthy of mention this morning. 1,840 introductions to Guernsey business in 2023, illustrating the value of our dedicated business development team. Our industry brings £1.3 billion to the local economy. It invests in our people, invigorates our economy, creates employment and the standard of living that all in this room today benefit from.
“£5.5 bn held with the Guernsey Green Fund regime, marking Guernsey as both an innovator and a leader in sustainable finance. Eight million reads of Guernsey Finance content in 2023, further connecting us to like minded professionals around the world and driving business to Guernsey. This is impressive connectivity by any standard.”
He said that no matter the outcome of the UK General Election, “our status as a reliable conduit of capital and all of our benefits to the UK will continue to be emphasised”.
He said Guernsey industry fosters social value both locally and across the water.
“We have a good story to tell, and we need to tell it.”
