This year’s Guernsey Funds Forum focused on the ‘Future of Funds’ with some fascinating insights shared by expert speakers and panellists. Here is our round-up of the top takeaways from the afternoon.
Location, location, location
Guernsey’s leading reputation across the globe was referenced throughout the event. Its position has been built over years of professional service, combining a pragmatic regulator, fast turnaround times and a fantastic pool of talent – all of which tells investors and financial service providers that this is a first-class place to do business.
The jurisdiction’s prominence as a vital partner for the venture capital and private equity markets across the UK, Europe and beyond means fund managers don’t need to waste time selling the fund domicile, they can focus on the all-important investment strategy.
Raising capital in times of turmoil and stagflation
It can’t be ignored that the previous twelve months have been fraught with economic turmoil with global events, including the war in Ukraine, having huge impacts on global inflation and interest rates. Combine this with the turbulence in the banking sector and it’s easy to see that raising capital can be challenging.
However, as keynote speaker Michael Moore, Director General of the BVCA stated, these challenges highlight the role Guernsey plays as a net contributor to the UK economy and valued partner to the City of London.
In fact, according to research published during the pandemic by Frontier Economics, Guernsey-domiciled funds enabled a capital flow of £41.6bn into the UK.
Guernsey’s reputation for funds listing on the LSE was underscored by panellist Laurence Hulse who explained why Dowgate Wealth chose Guernsey to domicile its latest fund which is also the first fund to IPO in two years.
Specialisms are not niches – and won’t be specialist for long
The event saw several ‘specialist’ funds discussed, including a food tech venture capital specialist looking at synthetic meat production, commercial forestry, and battery storage to name but a few. It is clear that tech-driven and specialist products have the ability to disrupt huge commercial markets and these innovations could soon become mass market and the ‘new normal.’ This scenario could offer attractive returns whilst also resulting in real world impact.
Going green is becoming mainstream
No longer the territory of the few, the interest in and demand for sustainable investing and ‘decarbonised’ investing is truly becoming mainstream as it sheds its old (oft mistaken) reputation of high risk and low returns. In fact, now some of the most alternative asset options available in the marketplace are considered sustainable or ‘green’ – and they out-perform other markets, providing good, diversified returns.
….but there is still work to be done
The need to create a more sustainable, decarbonised global economy is fast becoming a necessity and the way the global funds market can aid this transition is becoming more tangible. However, we are still in the early stages – a ‘green’ investment portfolio right now doesn’t directly result in real world decarbonisation and change. Defining ‘ethical’ and ‘sustainable’ around the world is not easy, nor is global appetite for it equal. Working together to create a trusted framework of metrics to bring these asset classes into the mainstream is a new challenge ripe for an innovative approach.
Stability meets innovation
As we look to the future, Guernsey offers a very unique proposition – its reputation as a safe, enabling environment for business combined with its agility and a supportive environment for innovation and cutting-edge funds and products. It is already an established leader in sustainable finance, and as the interest in ESG and ‘green’ finance grows, so do the opportunities for Guernsey.
Further exciting on island developments were revealed at the Funds Forum including The International Stock Exchange’s new private market offering which gives privately owned entities the ability to retain control but raise capital without the risks associated with going public. TISE Private Markets has a bespoke auction facility and a unique model to support growth, another innovation from the Guernsey based exchange.