BL Magazine Issue 59 November/December 2018

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The funds Edition 2018 SUBSTANCE • REGULATory review MANCOS • the need for funds TRAINING jersey and ICOs • mega-deals technology • what next for funds?


An alternative

view of diversity ISSUE 59 NOVEMBER/DECEMBER 2018

why funds boards need the right mix of skills

Our investment funds team is "a cut above the competition" LEGAL 500

No.1 We are the largest team of investment funds lawyers across the Channel Islands (CI).


1,200+ We advise more investment funds based in the CI than any other offshore law firm*.


We advise on 46% of new investment funds across Guernsey and Jersey*.


We advised on the launch of Jersey’s first Initial Coin Offering (ICO).

No.1 We are the leading adviser for listings on The International Stock Exchange (TISE).

We advise more companies and funds listed on the LSE than any other offshore law firm (CARG, 2018).

9/10 We are instructed by 9 of the 10 largest private equity firms worldwide (PEI, 2018).




We advise the SoftBank Vision Fund – the world's largest ever investment fund.

We were awarded 'best offshore firm' at The Drawdown's inaugural Private Equity Services Awards.

For further information, please contact one of our investment funds partners at *Based on the latest available statistics from Monterey Insight.








So long, farewell, auf wiedersehen, à bétôt… TEN YEARS AGO, I received an email from Kirsten Higgins, the co-founder of this magazine, asking if I’d be interested in heading up a brand new publication covering business and finance in Jersey. My knowledge of the island was limited at best – extending to Bergerac, cows and tax havens. And I’d been approached on many other occasions with offers of work that never materialised. So, to say I was doubtful about the prospect would be an understatement. Yet here I am, a decade older (and greyer), overseeing the 59th issue of Businesslife – and the one that will be my swansong. When they say a week is a long time in politics, 10 years on one magazine is an eternity. What started as, a Jersey-only title, became when we expanded into Guernsey, and then plain old BL when we rebranded in 2015 and started distributing in the City of London. As both Virginia Slims and Fatboy Slim have said: ‘You’ve come a long way, baby’. In that time, I’ve seen people in the Channel Islands move up the career ladder, and a fair few tumble down it. I’ve seen companies come and go. And I’ve moved from Brighton to Bristol to Leeds to Woolwich to Richmond to Brighton (again) and to Manchester, where I am now. I’ve had the good fortune to meet so many people who’ve contributed to the success of the magazine over the years – many of whom I now call friends. And I wouldn’t have been able to put together each issue of the mag had it not been for the support of all of the companies and agencies who put forward ideas for features, and people for commentary, each time. Plus there’s no way those 59 issues would have gone to print without the hard work of the Sub-Editors and Art Directors I’ve worked with over the years – most notably Kate Wheal and Angela Lyons, who’ve had to put up with my pickiness and dreadful design ideas for years. They both deserve a medal. And obviously, I wouldn’t have had the job in the first place, or kept it so long, had it not been for the support of Kirsten and of Carl Methven, the man who miraculously manages to keep the magazine on its feet from one issue to the next.

I know it’s not a very British thing to be proud of one’s achievements, but as I look back over the past 10 years, I’m immensely proud of everything that both I and the magazine have achieved. Launched on the back of the financial crisis, Businesslife has gone on to become the most highly regarded finance and business title in the Channel Islands – no matter what the others might claim. We didn’t get it spot on every time. And we certainly got it wrong on occasion – the cover for issue number five being a prime example, and one that haunts us to this day (look that one up on the BL website). But for the most part, I’d like to think we knew what we were doing! Yet, all good things must come to an end, and the time has come for me to bid my farewells and hand over the reins to the new broom, Eila Madden (pictured). She’s going to be a stellar addition to the magazine and, with her exceptional background in finance and business publishing, she’s going to take Businesslife to new heights. Old habits will die hard, though, and I’m sure to be watching out of the corner of my eye to see how she helps my baby grow even further. I’m excited to see what she does with it. But it’s not all misery. I will still be found loitering around St Helier and St Peter Port, working on a variety of projects with some of the islands’ biggest firms. It will hopefully keep me out of trouble. Anyway, enough of this sentimental nonsense. I shall leave you with this, my 59th and final edition, which takes our annual look at the funds industry in the islands. Enjoy your read! n

as I look back over the past 10 years, I’m immensely proud of everything that I and the magazine have achieved

Nick Kirby, (outgoing) Editor-in-Chief, Businesslife

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Combined strength. The Private Clients team in Jersey is committed to providing a personalised service that is tailored to each individual client, taking the time to understand what is important to our clients and providing intelligent solutions. Our Client Advisors have access to global UBS resources and ensure that every client receives the best possible wealth management advice. Michael Clarke, Head of Private Clients UBS AG, Jersey Branch 1, IFC St Helier, Jersey JE2 3BX 01534 701148

4 july/august 2015

UBS AG, Jersey Branch is authorised and regulated by the Jersey Financial Services Commission for the conduct of banking, trust, funds and investment business. Š UBS 2018. All rights reserved.



86 16 bl guernsey


The latest financial and business news and views from the bailiwick


Businesslife is published six times a year by Chameleon Group +44 1534 615886


48 7 News

48 regulatory review

72 coming soon...

A round-up of the latest Channel Island business news

It’s been a hectic 12 months in the funds regulation arena

Where will the Channel Islands’ funds industries be heading next?

14 Appointments

52 diversity

78 training

Recent key appointments for firms in Guernsey and Jersey

Why directors on funds boards need to have a mix of skills

Will a formal funds qualification help beat the skills shortage?

28 Interview

56 mega-deals

82 technology

Michael Collins, CEO of Invest Europe, talks all things funds

The Channel Islands’ role in some of the biggest recent funds deals

Getting to grips with the latest tech is vital for the funds sector

36 funds review

61 mancos The steady rise of the management company and the Manager of Managed Entities

86 investing in space

66 ICOs

89 start-ups

How Jersey is taking tentative steps into initial coin offerings

Six hot start-up sectors you might not have even heard of

A look back at the past 12 months for funds in the Channel Islands

42 substance How Guernsey and Jersey are meeting the challenge of proving funds substance

Want a slice of the space investment pie? Then boldly go where other investors fear to tread

24 bl Jersey A review of the main business developments and finance news stories

93 The Agenda Our lifestyle section gets all festive in preparation for a dazzling White Christmas

contributors The BL Global Discussion Forum


Follow us @blglobalnews Office: Meadowlands, La Rue a la Dame, St Saviour, Jersey JE2 7NQ © Chameleon Group Limited, all rights reserved. Reproduction in whole or in part without written permission is prohibited. Views expressed by our contributors are their own and do not necessarily represent the views or policies of Chameleon Group. While every effort is made to achieve total accuracy, Chameleon Group cannot be held responsible for any errors or omissions.

Opportunity is knocking for finance writer Dave as he first takes a look at growth in management companies and Managers of Managed Entities, before turning to what might come next for funds in the islands.


Having written for practically every issue of the magazine since it started, Dave gets the cover story this time and examines the importance of skills diversity on funds boards.


Business editor and writer Jon goes from one extreme to the other in this issue – from exploring the biggest mega-deals the islands have been involved in, to uncovering six hot new start-up sectors.


Businesslife regular Richard takes on a mammoth task this issue – covering reviews of both regulation and a year in Channel Islands funds, as well as making sense of substance. What a star!

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UK | Luxembourg | Jersey | Guernsey | Ireland | Ipes is regulated in each of the jurisdictions in which it operates. For more information, please see Statistics stated all as at 30 June 2018. Subject to regulatory approval Ipes has been acquired by Apex Group Ltd. The transaction is expected to be completed in the fourth quarter of 2018.

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JTC reports first results as a listed company

JERSEY-HEADQUARTERED FINANCIAL services group JTC has announced its first set of results as a London-listed company, reflecting a strong performance over the first six months of 2018. The results, announced to the market on 18 September, show that overall group revenue increased by £7.1 million (25.2 per cent) to £35.3 million and that underlying profits rose by £3.1m (56 per cent) to £8.6 million compared with the same period last year. The firm says the growth was achieved through a mixture of net organic growth and a positive contribution of the two acquisitions made during 2017 – New Amsterdam Cititrust in the Netherlands

and the Bank of America Merrill Lynch International Trust and Wealth Structuring business in the US, Cayman Islands, Geneva, Isle of Man and Singapore. There was a strong performance by two divisions – Institutional Client Services (15.3 per cent increase in total revenue) and Private Client Services (40.7 per cent increase in total revenue). Nigel Le Quesne (pictured), JTC’s Chief Executive Officer, said: “As well as good progress integrating the businesses acquired in 2017, we have made two further acquisitions post-period end – Van Doorn and Minerva. We have several other potential targets where we are engaged in negotiations.” n

PraxisIFM reports revenue increase PRAXISIFM GROUP has reported an increase in revenue of 21 per cent as part of the company’s 2018 annual results. Revenue rose to £42.5 million, with adjusted EBITDA up from £9 million in 2017 to £9.9 million this year. The group also reported organic growth of 11 per cent and a dividend payment of 2p per share. Chairman Andrew Haining commented: “As a private company, the group has previously demonstrated the ability to acquire, integrate and develop its business. As a public company, we continue to build on that approach using the additional benefit of being listed to drive growth.”

Acquisitions and office openings over the past 18 months have brought the global office count to 17. The group’s three main divisions all reported strong organic growth, with Trust and Corporate Services, and Fund Services, growing revenue by 12 per cent. The Pension Services division grew by 173 per cent, driven by the acquisition of a 50 per cent stake in Netherlands-based corporate pension administration business RiskCo. In Trust and Corporate Services, the main acquisition was Kompas International – Nerine Group and Jeffcote Donnison were acquired after the year end. n

New London office for Hawksford FINANCIAL SERVICES PROVIDER Hawksford has opened a new office in London following the acquisition of the corporate services business of audit and accountancy practice SH Landes. Hawksford will provide specialist corporate services from the new office on New Oxford Street. The firm said the acquisition strengthens its service offering – providing administration, accounting and reporting, company secretarial and related backoffice services to private and corporate clients internationally. The office will remain under the leadership of Steven Landes, a Chartered Accountant with more than 30 years’ experience in the international financial sector, who worked at Ernst & Young before setting up SH Landes in 1993. Hawksford Chief Executive Michel van Leeuwen said: “This move gives us a strong presence in one of the world’s leading international finance centres. It builds on our international expertise to extend our service offering to UK-based structures.” n

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Done Deals Appleby has assisted management firm DBAY Advisors with its £98.7 million takeover bid for AIM-listed IT and recruitment specialist Harvey Nash. Appleby provided Jersey and Cayman Islands law advice on the transaction, and was instructed by DBAY Advisors in its capacity as investment manager to DouglasBay Capital II Fund and DouglasBay Capital II Cayman Fund. The Jersey team at Appleby was led by Corporate Partner Andrew Weaver, with assistance from Associates Zim Ceko, Chris Smedley and Karishma Beegoo.

Saffery Champness opens Dubai office GUERNSEY-BASED SAFFERY Champness Registered Fiduciaries has opened an office in the United Arab Emirates, within the Dubai International Financial Centre. The new permanent office has been established to support and expand the firm’s intermediary network and assist with servicing existing clients across the Gulf Co-operation Council and wider region. It will form a regional hub for business development. The initiative has been led by Guernsey office Managing Director Nick Batiste. Director Philip Radford and General Counsel Ajay Wiltshire will lead the firm’s presence in the region. n

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Bedell Cristin Guernsey has acted as lead adviser to EV Private Equity – an independent growth equity firm focusing on new technologies in the oil and gas sector – on the launch of its latest Guernsey fund, EV Private Equity V Plus LP, a Guernsey Private Investment Fund (PIF). The PIF was structured as a closedended limited partnership to make investments in oil and gas services companies that deploy technologies to enable oil and gas exploration and production companies to increase productivity, lower cost and lower risk. Bedell Cristin’s team was led by Guernsey Managing Partner Kate Ovenden and Managing Associate Lee Osborne. Offshore law firm Carey Olsen has advised Singaporean ultra-high-networth family office Pacific Eagle on the £180 million purchase of Belstaff House in London. The property in New Bond Street is a Grade II-listed building and home to luxury clothing brand Belstaff’s flagship London store. Partner Robert Milner led the Carey Olsen team advising Pacific Eagle, assisted by Associates David Patterson and Richard Macfarlane. The firm advised on all Jersey legal and regulatory aspects of the purchase, which was completed by way of acquisition of a Jersey Property Unit Trust. Collas Crill’s Jersey team has advised real estate investment advisory firm Marchmont FM on its collaboration with NW1 Partners to set up a £100 million fund to buy UK small-cap urban industrial assets. The two real estate investment specialists have formed NW1 Partners/ Marchmont UK Last Mile Logistics Venture. Collas Crill advised on the formation of a

Jersey Private Fund to invest in UK real estate as a separately managed feeder vehicle investing into Last Mile UK Logistics Jersey SLP. The Collas Crill team included Group Partner Dilmun Leach and Associate David Walters. The venture’s aim is to assemble a portfolio of industrial assets in London and other UK cities. Offshore law firm Mourant Ozannes has advised Low Carbon, a privately owned investment company, in connection with the establishment of VLC Renewables Fund I. VLC Renewables was established in Jersey as an unregulated eligible investor fund, and structured using Jersey limited partnerships. It was created to invest in renewable energy projects, which received initial commitments of €200 million from Vitol, one of the world’s largest energy companies. The Mourant Ozannes Jersey Investment Funds team was led by Partner Mark Chambers, alongside Senior Associate Matt McManus and Associate Rachel McGinness. Ogier’s Jersey corporate law team has advised on the purchase of a £13 million Manchester city centre student housing project. Partner Sara Johns and Senior Associate Oliver Richardson led the team, who advised a Singapore-based bank on the Jersey law aspects of the transaction. The team was instructed by the Singapore bank in relation to a £13 million facility to finance the acquisition of land and buildings at 121 Princess Street in Manchester. The commercial real estate financing deal facilitates the acquisition by Centurion Corporation, which specialises in developing and managing workers and student accommodation. Voisin Law’s corporate and commercial property teams have advised Jersey pub and restaurant group Randalls on its takeover of The Boat House, St Aubin, and The Farm House, St John. This brings Randalls’ total number of outlets to 49, following approval from competition authority CICRA. The group is planning a major refurbishment of The Boat House’s first floor restaurant, starting in November. On completion, the venue will reopen as the Anchor Club. The Voisin team consisted of Managing Partner Ian Strang, Head of Property Natalie Harris and English Solicitor Stephanie Habin. n


The art of banking relationships

If you’re in the alternative investment funds industry, talk to us. Our comprehensive funds banking offering exists to help you achieve your goals. We take a consultative approach, forming long-term partnerships and applying sector insight to tailor solutions to your needs. The strategic and executional capabilities of our people are complemented by the power of eQ, our smart, multi-currency banking platform.

Working with: • Private Equity • Private Equity Real Estate • Infrastructure and Renewable Energy • Private Debt • Asset Managers • Fund Administrators

For more information, contact: Peter Brown Head of Funds Banking +44 (0)20 7714 4106

The Royal Bank of Scotland International Limited (“RBS International”) is incorporated in Jersey and registered on the Jersey Financial Services Commission (“JFSC”) company registry as a private company with limited liability. It is authorised and regulated by the JFSC with registration number 2304. Registered and Head Office: Royal Bank House, 71 Bath Street, St. Helier, Jersey, JE4 8PJ. Tel. 01534 285200. RBS International London Branch is registered in the United Kingdom as a foreign company with registration number FC034191 and branch number BR019279. United Kingdom business address: 1 Princes Street, London, EC2R 8BP. RBS International London Branch is authorised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority (reference number 760675) and limited regulation by the Prudential Regulation Authority. Details about the extent of RBS International’s regulation by the Prudential Regulation Authority are available on request. Guernsey business address: Royal Bank Place, 1 Glategny Esplanade, St. Peter Port, Guernsey, GY1 4BQ. Tel. 01481 710051. Regulated by the Guernsey Financial Services Commission and licensed under the Banking Supervision (Bailiwick of Guernsey) Law, 1994, as amended, the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002 and the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. The Royal Bank of Scotland International Limited, Luxembourg Branch, (RBS International Luxembourg Branch). Business address: 46 Avenue J F Kennedy, L-1855, Luxembourg. Tel. + 352 270 330 355. Authorised and supervised by the Commission de Surveillance du Secteur Financier. Isle of Man business address: 2 Athol Street, Douglas, Isle of Man, IM99 1AN. Tel. 01624 646464. Licensed by the Isle of Man Financial Services Authority in respect of Deposit Taking, Investment Business and registered as a General Insurance Intermediary. NatWest International is the registered business name of The Royal Bank of Scotland International Limited under the Business Names Registration Act. Gibraltar business address: National Westminster House, 57 Line Wall Road, Gibraltar. Tel. 200 77737 or 200 73200. Regulated and authorised by the Financial Services Commission, Gibraltar to undertake Banking and Investment Business from 55 and 57 Line Wall Road and 1 Corral Road, Gibraltar. Our services are not offered to any person in any jurisdiction where their advertisement, offer or sale is restricted or prohibited by law or regulation or where we are not appropriately licensed. Calls may be recorded. Internet e-mails are not necessarily secure as information might be intercepted, lost or destroyed. Please do not e-mail any account or other confidential information.

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TISE home to first listing of digitised notes THE INTERNATIONAL STOCK Exchange (TISE) has become home to what is believed to be the first listing on a regulated exchange of notes digitised on a blockchain. Dom Re IC has issued notes digitised on a private blockchain. Referred to as ILSBlockchain, the mechanism replaces the role of a traditional settlement system for the note issue. Dom Re is a cell of Solidum Re (Guernsey) ICC, which is a wholly-owned subsidiary of insurance-linked securities (ILS) manager Solidum Partners. Solidum Re was the first ILS specialist to become a member firm of TISE when in July it was approved to arrange and sponsor the listing of debt securities and investment vehicles on the exchange. A total of $15 million principal-atrisk participation notes, due in 2024 and issued by Dom Re, have been listed on TISE. Blockchain is the digital ledger system that underpins Bitcoin and other cryptocurrencies. In 2016, TISE also became home to GABI, which at the time was the first regulated Bitcoin fund to be listed on any exchange globally. n

Sanne gains Hong Kong TCSP licence SANNE GROUP ASIA has been authorised by the Hong Kong Companies Registry, under Section 53G of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, to act as a trust or company service provider (TCSP) in Hong Kong. The authorisation will enable the company to provide an enhanced suite of services to alternative investment managers across the Asia-Pacific (APAC) region, in addition to its

existing offering as a trust or company services provider. Martin Schnaier, Chief Commercial Officer at Sanne, commented: “Our new licence enables us to strengthen the services we provide to our APAC clients from large asset managers, investment funds, corporate and financial institutions. “It also enhances our funds capability in the region, which fits our APAC growth strategy.” n

Waves goes into liquidation

Fairway opens Bahrain office

Islands slump in global index

GUERNSEY AIRLINE WAVES announced in September that its parent company, Waves Technologies, is going into voluntary liquidation. The airline’s owners say pressure from Waves’ recent Royal Court and Petty Debt judgments has forced the company into liquidation. WO1, the company running Waves itself and a fully-owned subsidiary of Waves Technologies, remains active, but hasn’t taken any bookings for flights since earlier this year. Joint liquidators Carter Backer Winter (Guernsey) and agent SIA Group (UK) are in talks with potential buyers for WO1, with the hope of confirming a trade sale before the year end. n

FIDUCIARY GROUP FAIRWAY has opened a new office in Bahrain – its first office outside Jersey – and has appointed Graeme Fairlie as its Regional Manager in the country. Fairlie will combine this new role with his current position of international Business Development Executive within the firm. He has been with Fairway since 2015, prior to which he worked as a Business Development Manager for Apex Fund Services (Dubai). Fairway’s move into Bahrain comes on the back of successful partnerships in the Gulf region, including with banking group Emirates NBD in Dubai. n

ISLAND FINANCIAL CENTRES have performed poorly in the latest Global Financial Centres Index, GFCI 24, which provides rankings for 100 major financial centres around the world. With the exception of Bermuda, which rose six places, the Crown Dependencies of Jersey, Guernsey and the Isle of Man all fell significantly in the rankings – Jersey down eight places to 47, Guernsey down seven to 60, and the Isle of Man down 27 to 85. Produced by the China Development Institute and Z/Yen Partners in London, the GFCI is updated every March and September. New York took first place, two points ahead of London. n

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Cyber security assessment for businesses in the Channel Islands

We get that you are worried about cyber security but keep in mind that managing cyber risk effectively isn’t just a technology issue. It’s a combination of people, process and technology. Here at PwC, we’ll help you understand your cyber vulnerabilities by looking at all three aspects. Protect what matters to you. Visit our website or email today.

© 2018 PricewaterhouseCoopers CI LLP. All rights reserved. “PricewaterhouseCoopers” and “PwC” refer to the Channel Island firm of PricewaterhouseCoopers CI LLP, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. PricewaterhouseCoopers CI LLP, a limited liability partnership registered in England with registered number OC309347, provides assurance, advisory and tax services. The registered office is 1 Embankment Place, London WC2N 6RH and its principal place of business is 37 Esplanade, St. Helier, Jersey JE1 4XA.

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Maples and Calder opens Jersey office LAW FIRM MAPLES and Calder has a new office in Jersey. The group now provides Jersey legal services in the corporate, finance and investment funds areas, as well as listing agent services for the listing of securities on The International Stock Exchange in the Channel Islands. The opening adds to the firm’s existing British Virgin Islands, Cayman Islands and Irish legal services. Maples and Calder has made three senior hires to support the expansion. The office is managed by Jersey Advocate Chris Byrne, who brings over 20 years’ experience in the island’s legal market as a Senior Partner at Ogier in Jersey. He is joined by Simon Hopwood, formerly a Partner at Bedell Group, and Paul Burton, a Senior Associate at Carey Olsen. These three senior hires will be supported by Associates Anna Cochrane and Stephanie Edge, and other lawyers are due to join the team this autumn. n

STRONG H1 for Standard Bank Wealth International STANDARD BANK WEALTH International – which is headquartered in Jersey, with offices in the Isle of Man, Mauritius, London and South Africa – has announced a strong set of results for the first half of 2018. The firm’s headline earnings (the primary measure of earnings after tax and other adjustments) rose from £19.4 million to £25.5 million, while return on equity increased from 17.6 per cent to 19 per cent compared with the prior year. In addition, client deposits increased by 4.7 per cent to £5.2bn and assets under management rose by 19.4 per cent to £2.9bn. n

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MERGERS AND ACQUISITIONS Fiduciary and administration provider Estera has acquired Luxembourg-based third-party management company Allegro. The deal, agreed on 20 September, is subject to regulatory approval in Luxembourg. Allegro, which was founded 10 years ago, is a licensed and regulated fund management company providing services in the alternative asset space. It provides AIFM and fund administration services to AIF, RAIF, non-AIF and UCITS funds with around €8.2bn in AUM. Its clients are large-scale institutional investors, international fund promoters and investment managers. The acquisition enables Estera to provide its clients with investment fund services in Luxembourg and adds to its existing funds offering. It means Estera now operates in 11 jurisdictions, including Jersey and Guernsey. Fund, corporate and private wealth services provider JTC has entered into a conditional agreement to acquire Jersey firm Minerva. The transaction was expected to complete in early November, subject to regulatory approvals, with full integration of Minerva’s business into JTC due to be completed by June 2019. Minerva has been providing global private client, corporate, fund and treasury services for more than 40 years. The acquisition will add a Dubai office to JTC’s global network and increase the company’s services in five of its existing locations – Jersey, London, Geneva, Singapore and Mauritius. In addition, it will extend JTC’s reach in sub-Saharan Africa, India and Asia and expand the firm’s treasury services offering. The total consideration payable is subject to an absolute cap of £30 million, subject to customary closing adjustments. Financial services group Ravenscroft is to acquire Royal London Asset Management CI and Royal London Custody Services CI to expand its cash management offering. The two businesses are being bought for an undisclosed sum from Royal London Mutual Insurance Society, with all five employees moving across to Ravenscroft as soon as the sale has been completed. The acquisition, which is subject to

approval by the Guernsey Financial Services Commission, will increase Ravenscroft’s assets under administration to more than £6.5bn. The two companies will be rebranded as Ravenscroft. Vantage HBA (VHBA) has acquired Isle of Man-based company Arpeggio. VHBA, a Jersey-based specialist human resources advisory and recruitment firm, also provides remuneration surveys for all job levels and pay sectors. It has provided surveys in the Channel Islands for 22 years and in the Isle of Man for the past 16. As well as offering a similar range of advisory services to VHBA, Arpeggio has, for the past 14 years, delivered salary and benefits reviews in the Isle of Man through its Arpeggio Pay Club. The acquisition will mean VHBA will double the number of firms participating in its survey across the Isle of Man. The new Isle of Man organisation will trade as Vantage Arpeggio. Real estate services and investment management company Colliers International has acquired Jersey-based firm Asset Leverage Consultants (ALC). ALC Managing Director Ben Thomason and six others from ALC will transfer to Colliers International Jersey, as part of the firm’s UK National Capital Markets division. Thomason moves to Colliers as Director and Head of Debt Advisory in the UK. He has served as Managing Director at ALC since 2013, providing debt advisory solutions across all real estate asset classes. Colliers said the acquisition would enable it to provide debt advisory lending solutions across the capital stack through a single point of contact. Financial services provider Zedra has received approval from the Malta Financial Services Authority to complete the acquisition of Malta-based Quaestum Corporate Management, announced in May. Quaestum Group, an independent corporate service provider based in St Julians, Malta, specialises in delivering corporate management solutions to support tax planning strategies for international entrepreneurs and corporations. The acquisition adds a new jurisdiction to Zedra’s portfolio. n


We believe in building successful, long-term relationships. We are Butterfield.

At Butterfield, we specialise in assembling the best people, products and services to create bespoke financial solutions for wealth management and the financial intermediary market. It is a skill Butterfield has honed over 160 years in banking. Although much has changed over that period of time, our core values, entrepreneurial spirit and unrelenting focus on our clients’ needs, remains at the heart of everything we do.

Butterfield Bank (Guernsey) Ltd PO Box 25, Regency Court, Glategny Esplanade, St. Peter Port, Guernsey GY1 3AP

To find out more about Butterfield’s personalised wealth management services, please contact one of our Business Development Advisers: GUERNSEY +44 (0)1481 711521 or e-mail JERSEY +44 (0)1534 843333 or e-mail

Butterfield Bank (Jersey) Ltd PO Box 250, St. Paul’s Gate, New Street, St Helier, Jersey JE4 5PU

THE BAHAM AS • BERMUDA • CAYMAN ISL ANDS • GUERNSE Y • JERSE Y • SINGAPORE • SWITZERL AND • UNITED KINGDOM Butterfield Bank (Guernsey) Limited (“BBGL”) is licensed and regulated by the Guernsey Financial Services Commission (“GFSC”) under the Banking Supervision (Bailiwick of Guernsey) Law, 1994, The Protection of Investors (Bailiwick of Guernsey) Law, 1987 and the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2000, each as amended from time to time. Company Registration No. 21061. BBGL is a participant in the Guernsey Banking Deposit Compensation Scheme. The Scheme offers protection for ‘qualifying deposits’ up to £50,000, subject to certain limitations. The maximum total amount of compensation is capped at £100,000,000 in any 5 year period. Full details are available on the Scheme’s website www. or on request. Butterfield Trust (Guernsey) Limited (“BTGL”) is licensed and regulated by the GFSC under the Regulation of Fiduciaries, Administration Business and Company Directors, etc, (Bailiwick of Guernsey) Law, 2000, as amended. Company registration No 31645. BBGL and BTGL are both registered under the Data Protection (Bailiwick of Guernsey) Law 2017 and are registered for the purposes of The Companies (Guernsey) Law 2008. Their registered office is P.O. Box 25, Regency Court, Glategny Esplanade, St Peter Port, Guernsey GY1 3AP. Butterfield Bank (Jersey) Limited (“BBJL”) is regulated by the Jersey Financial Services Commission to conduct deposit taking business under the Banking Business (Jersey) Law 1991 (as amended) and money service business under the Financial Services (Jersey) Law 1998 (as amended). BBJL is registered under the Data Protection (Jersey) Law, 2018 and is registered with the Jersey Registrar of Companies for the purpose of the Companies (Jersey) Law 1991 (as amended). BBJL’s registered office address is St Paul’s Gate, New Street, St Helier, Jersey JE4 5PU. Company registration number 124784. BBJL is a participant in the Jersey Bank Depositors Compensation Scheme. The Scheme offers protection for eligible deposits of up to £50,000. The maximum total amount of compensation is capped at £100,000,000 in any 5 year period. Full details of the Scheme and banking groups covered are available on the States of Jersey website, or on request. BBGL, BTGL and BBJL are wholly-owned subsidiaries of The Bank of N.T. Butterfield & Son Limited. Photo by Lachlan Dempsey on Unsplash.

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Appointments Jo Stoddart, CEO and founder of Quintessential Relocation Consultants (QRC), has been named as the new Director of Locate Guernsey for the next three years. She takes over from Andrew Carey, who has become a Practice Manager at Island Health Group. Jo moved to Guernsey in 2005 and has managed QRC since founding it in 2010. She expanded the business’s operations to Jersey in 2013. Jo has also chaired the Association of Relocation Professionals since June 2017. Locate Guernsey, which was launched in 2016 as a three-year pilot, secured three more years of funding in July.

Chris Barling has joined the board of Ravenscroft Holdings, bringing 10 years’ experience at plc board level as an Executive, Senior Independent Director and Chair of Remuneration. He’s worked with FTSE 100 and FTSE 350 companies, including eight years with Hargreaves Lansdown. Chris specialises in product development and the impact of digital on business. His early career included 10 years with Cable & Wireless and he’s co-founded and directed several tech start-ups. Most recently, Chris co-founded Powered Now, a mobile app for building contractors to issue quotes, estimates and invoices.

Canaccord Genuity Wealth Management has appointed Tim Sanders as Head of its Jersey office. Tim joins from Brooks Macdonald, where he has been Senior Investment Director for the past seven years. He manages a wide range of investment mandates, with a focus on international and bespoke asset management for highnet-worth individuals, charities and the intermediary market. Tim has worked in New York as a foreign exchange and derivatives trader and has held senior positions in treasury, business development and wealth management. He has worked for Morgan Stanley Quilter and HSBC in Jersey.

Collas Crill has appointed Christine Fox as Counsel in its corporate, finance and funds team in Jersey. Christine has over 15 years’ legal experience and advises on a broad range of matters, including major financial institutions, private equity houses and large corporate groups. She has worked on the Jersey aspects of complex, high-value and multi-jurisdictional transactions. Prior to joining Collas Crill, Christine worked for four years as a Senior Associate within the Jersey banking team of Carey Olsen. Before this, she spent two years as a legal adviser in the legislative projects team of the States of Jersey’s Law Officers Department.

Public relations professional Dan Gallienne has been promoted to the senior team at Orchard PR. Having joined Orchard four years ago as an Account Executive, he has now been named Account Director at the communications company. More recently, as Account Manager, he has had responsibility for two clients, supported colleagues on four other clients across the Channel Islands and Isle of Man, and managed ad hoc PR projects. He has also played a role in winning new business. Dan is an active member of the CIPR Channel Islands group.

BCR Law has announced that Advocate Alison Brown has joined the firm, where she will specialise in family and criminal law matters. Advocate Brown trained as an English solicitor in York, qualifying in 1981. She practised law in Yorkshire before moving to Jersey in 2004 and was called to the Jersey Bar in November 2016. Prior to joining BCR, Alison worked for LWR Law in Jersey. Before this, she was with Collas Crill. Her practice has included advising separating and divorcing couples on finances and children law, as well as on pre- and post-nuptial settlements.




march/apri O U T P L12 ACE M E N T S ElR2017 VICES




The Institute of Directors has named Charlotte Valeur as its new Chair. Charlotte has held seven directorships at public companies, including three as Chair. With a background in finance, including at Société Générale, BNP Paribas and SG Warburg, Charlotte has experience in a range of areas, from property to energy. She has served on the boards of Jersey-based investment firm 3i Infrastructure and Kennedy Wilson Europe Real Estate, and her unlisted experience includes a non-executive directorship of engineering firm Laing O’Rourke. Charlotte is also a keen advocate for diversity in the boardroom, founding Board Apprentice.

RBC Wealth Management has appointed Martyn Russell as Trust Director in the firm’s Guernsey-based Fiduciary Services business. Martyn brings nearly four decades of experience to the role, having been a Director at Equiom (Guernsey) – formerly Ardel Trust Company (Guernsey) and Bachmann Trust Company. Here, he led the client services teams and administration of client structures, including trusts, companies, foundations, partnerships, pensions and employee benefit trusts. In his new role, Martyn has responsibility for a portfolio of high-net-worth clients and the oversight and administration of new clients.

Scott Workman, former Chief Operating Officer at the Ministry of Defence’s Information Systems and Services division, has been appointed Chief Executive Officer of Channel Island technology business C5 Alliance. Scott has worked within the MoD since 2007. He has extensive experience in defining technology requirements in the world’s most challenging environments. His high-level roles have seen him lead in the adoption of new technologies. At the MoD, he led a team of military, public service and technology industry specialists in delivering an ambitious programme to transform information services.

Bedell Cristin has appointed Guy Westmacott as a Partner, two years after he joined the firm. A specialist in corporate and commercial matters, particularly mergers and acquisitions, Guy works on a variety of international transactions and advises on related regulatory aspects, including competition and financial services. He has 16 years’ experience in the legal sector, having worked in London at Eversheds and Vinson & Elkins, and in the United Arab Emirates while in-house with Mubadala Investment Company. Guy joined Bedell Cristin in 2016 and earlier this year was promoted to Managing Associate.

Highvern has appointed private equity specialist Mark Primrose as an Associate Director and Head of Client Accounting. Mark qualified as a Chartered Accountant with KPMG before moving to an in-house role with Apax Partners. He joins Highvern having most recently spent six and a half years in a funds management role with Moore Management. Mark brings extensive experience within private equity and fund administration to the new role, in which he will be delivering client services and playing a broader role in helping Highvern achieve its long-term strategy.

Law firm Appleby has appointed James Fox as Partner within the group’s Jersey corporate team. James, a Jersey Advocate, has more than 18 years’ experience as a transactional corporate and commercial lawyer. He started his career at Shepherd and Wedderburn, then Dundas & Wilson in the UK, before working at Carey Olsen in Jersey for 11 years. James is an established practitioner in the funds and M&A sector. He has also acted for a large number of listed companies in relation to flotations, secondary fundraisings and corporate matters such as regulatory compliance.

FINDING THE BEST BRAINS IN THE BUSINESS, WE CALL IT RESOURCING EXCELLENCE. l 2017 13 W W W . K E N D R I C K R O S E . C O M I N F O @ K E N D R I C K R O S E . C O M 0 1 5 3 4 7 1 march/apri 5 150

BL guernsey value of Funds business hits five-year high


he total value of funds business in Guernsey is at a five-year high, following a predicted rise in net asset value in Q2 2018, according to the latest figures from the Guernsey Financial Services Commission (GFSC). The figures for the end of June 2018 showed that net asset value stood at £276.2bn, the highest since the end of June 2013, representing an increase of more than £13bn (4.94 per cent) on Q1 2018, and a 12-month growth of more than £5bn (1.9 per cent). Private equity business was a huge contributor, with a near £7bn (6.6 per cent) increase on Q1 to £112.7bn, accounting for more than half of the overall increase. Guernsey-domiciled closed-ended funds are at an all-time high, standing at

£168.2bn following a quarterly increase of £0.4bn (0.22 per cent) and an annual rise of £1bn (0.61 per cent). Open-ended funds rose £1.4bn (3.4 per cent) over the quarter to £43.2bn, representing an annual decrease of £0.7bn (-1.6 per cent). Non-Guernsey schemes – funds not domiciled in the island but with some aspect of their management, administration or custody carried out locally – grew by 22.9 per cent (£11.9bn). An increase of £4.9bn (8.07 per cent) since 30 June 2017 values them at £64.7bn – the highest level since September 2014. Guernsey Finance Chief Executive Dominic Wheatley (pictured) commented: “We knew of a number of new enquiries in the pipeline that would bear fruit in Q2, and it’s satisfying to see that reflected in

the latest figures. We have confidence that will continue as further work on new business continues. “Activity such as updating the regulations for the Guernsey Private Investment Fund (PIF) has certainly had an effect. There were seven PIFs launched in Q2, and 13 so far this year, which is already ahead of the total 2017 figure. “The increase in the value of non-Guernsey schemes also reflects a combination of strong manager performance, high subscription levels and weakening sterling against key currencies.” Detailed statistics from the GFSC’s Investment Supervision and Policy division are available at n

Guernsey retains best fund admin centre title

GDP figures released

GFSC announces fee freeze




uernsey has retained the title of Best Centre for Fund Administration at the 2018 Investment Week Fund Services Awards, presented in London at the beginning of October. Guernsey Finance Chief Executive Dominic Wheatley said: “To be recognised as the best for two years in a row shows Guernsey continues to demand and deliver high standards that set it apart from other jurisdictions. We’re still getting a high volume of incoming and repeat funds business from all over the world, which produces encouraging figures. “This award is a testament to the hard work being done in our funds sector by all parties, and new products such as the Guernsey Green Fund have helped us stand out. The island continues to offer an excellent, stable and competitive business environment.” n

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irst estimates of Gross Domestic Product (GDP) for 2017 show a period of strong growth for Guernsey’s economy. According to the latest Guernsey Annual Gross Value Added and Gross Domestic Product Bulletin, the economy grew in real terms by two per cent, to give a total of £3.05bn. Current estimates show that GDP per person, which provides an indication of the island’s standard of living, grew in real terms by 2.4 per cent in 2016 and 2017. Data in the bulletin confirms the health of the economy during 2017. This had previously been indicated by stronger than expected growth in government revenues, falling unemployment and the expansion of the workforce during the year. Statistics for the first half of 2018 show continued low levels of unemployment and a further expansion of the workforce. The most recent population estimates, for the third quarter of 2017, also reflect a resumption of net immigration. Together, these suggest that economic growth has continued into 2018. The Guernsey Annual GVA and GDP Bulletin can be viewed at n

he Guernsey Financial Services Commission (GFSC) has decided not to increase its fees for the next two years. According to the Commission, recent changes to the accounting treatment of its former pension liabilities, together with past operational surpluses, have ensured that it doesn’t need to set fees with a view to accumulating reserves to cope with contingencies. The GFSC has historically consulted annually with industry on proposals for increasing the fees it charges licensees – its principal method of funding operational costs, including any capital expenditure. Chairman Cees Schrauwers said: “For the last five years, the Commission has returned operational surpluses whilst regulating with integrity and proportionality. At the same time, we have limited our fee increases and controlled our costs effectively. “We aim to maintain a balanced budget on a long-term basis, but we think our finances are robust enough at present to allow us to freeze fees at current rates for 2019 and 2020.” In light of this decision, there will be no formal consultation paper this year. n



Bank Julius Baer & Co. Ltd., Lefebvre Court, Lefebvre Street, St Peter Port, Guernsey GY1 4BS, T +44 (0)1481 726618 Bank Julius Baer & Co. Ltd., Guernsey Branch is licensed in Guernsey to provide banking and investment services and is regulated by the Guernsey Financial Services Commission.

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True convergence: a revolution for ILS funds Richard Sharp, Partner at Bedell Cristin, explains insurance-linked securities (ILS) and explores their origins, and Mark Helyar, Of Counsel, and a leading Guernsey legal practitioner in the ILS sector, reveals the Fund of One concept he devised and has been working on with industry, investors and the island’s regulator INSURERS ASSUME RISK under the insurance policies they write, in return for the premiums they receive. They manage that risk by diversifying over a large number of policies and the types of events they insure, and also by reinsuring with other insurers. Insurancelinked securities (ILS) are one way in which insurers and reinsurers reduce risk by using financial instruments to securitise the risk and transfer it to investors in the capital markets. In short, ILS are simply financial instruments whose value is linked to an insured event. An example would be where a life insurer reinsures some or all of the risk under its customers’ life policies with a Guernsey special purpose vehicle (SPV) insurer. The SPV raises the collateral it needs to cover any payouts under the reinsurance it’s provided, by selling securities to investors. This transfer of risk to the capital markets first started following Hurricane Andrew in 1992 – one of the most expensive storms ever. After Andrew, there was a demand for greater levels of cover, but this demand outstripped the capacity in the traditional reinsurance markets. This led to the first catastrophe bonds – a type of ILS that raises capital to cover losses associated with natural catastrophes – being issued in the 1990s. Having started with catastrophe bonds, the ILS market has since developed and expanded rapidly and now includes a wide range of securities, structures and insured risks. Where catastrophe bonds saw risk looking for capital, collateralised reinsurance sees capital looking for risk. ILS are particularly attractive as a way for traditional investors to diversify and receive returns that aren’t correlated to the usual factors that cause volatility in financial markets, such as interest rates. Indeed, ILS returns have been relatively high in recent times compared with traditional capital or debt markets. ILS structures typically use offshore finance centres, and Guernsey has a

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reputation as one of the pre-eminent centres for ILS business. Guernsey’s position has been built over decades on its range of cellular vehicles, the expertise of its insurance managers and other professional advisers, and a flexible and proportionate approach to regulation.

THE FUND OF ONE The structures being used in the ILS market are always evolving as jurisdictions

The structures used in the Insurance-linked securities market are always evolving, as jurisdictions look to remain competitive by being more efficient

look to remain competitive by being more efficient. At the moment, you may see a fund structure for ILS investors, perhaps based in Bermuda, investing into a Guernsey ILS SPV reinsurer. Inherent in that is a layer of duplication caused by the involvement of multiple jurisdictions and separate investment and insurance vehicles. This adds complexity and challenges, such as a double layer of regulation and different time zones, and creates extra costs in areas such as audit and administration. The Fund of One concept proposes that the same structure acts as the investment vehicle and the insurance vehicle. This single Guernsey vehicle would look to take advantage of both of Guernsey’s highly developed funds and insurance offerings at the same time, but only be regulated in respect of its insurance activities and not subject to separate additional regulation as a fund. The Fund of One would also offer the possibility of using the investor-friendly Guernsey limited partnership as the structure vehicle. As well as adding value for ILS investors by increasing efficiency and reducing costs, the Fund of One will increase transparency for ILS fund managers. A simplified structure allows greater visibility and control on the investment chain. The Fund of One is, therefore, ideally suited for larger investors and their managers, who want more control over their investments and aren’t simply content in the role of typical passive private investors. At present, the first Funds of One are being discussed with the Guernsey Financial Services Commission. The coming together of the insurance and capital markets has been referred to as convergence. The Fund of One will take this one step further and represents true convergence. With the total ILS market expected to continue to grow, the Fund of One is an exciting development in Guernsey’s ILS offering, which will no doubt reinforce its position as a leading jurisdiction of choice for ILS business. n

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Insolvency law ready for change Advocate Todd McGuffin, Dispute Resolution Partner at Babbé, explains the proposed changes to Guernsey’s corporate insolvency regime and their intended benefits to business and creditors Guernsey corporate insolvency law is about to undergo significant change. How has this come about? It’s been a long and adventurous journey for the Guernsey corporate insolvency regime since the last significant changes were made by the introduction of The Companies Law (Guernsey) 2008. While some helpful legislative changes have been signposted by industry and implemented since then, insolvency lawyers and practitioners alike have identified a number of areas ripe for reform. In response, the States has conducted a comprehensive review of the law over the past four years. Will the proposed changes benefit Guernsey business? The proposed reforms will modernise and improve Guernsey’s competitiveness as an international finance centre by providing greater clarity and certainty to investors and lenders with respect to exit strategies for businesses. The changes are intended to improve the quality and flow of credit into the Guernsey economy, as they will enable creditors to understand from the outset how a liquidation or administration will progress. This, in turn, should facilitate a greater willingness of the markets to lend in the jurisdiction and therefore enable further economic growth. Will the proposed changes benefit creditors when a company is insolvent? A significant proposal, aimed squarely at creditor protection, is in the area of insolvent winding-ups. A solvent liquidation, by definition, is friendly to creditors and therefore less protection is required. An insolvent liquidation, however, is the opposite situation, since not all creditors will be paid what they are owed. A potential conflict of interest might therefore arise where a director or member of the company (who could stand to benefit if a creditor’s claim were denied) is responsible for the winding-up process. Two changes are expected to be introduced to address this issue. First, there will be the requirement for liquidator

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independence in an insolvent voluntary winding-up. A person related to the company (a director or shareholder) can still be appointed as liquidator on a solvent voluntary winding-up, and in many cases this will be appropriate to save time and costs. However, independence of the officeholder will be required where a liquidator is voluntarily appointed to wind up an insolvent company. Second, the introduction of a requirement that a liquidator in a voluntary insolvent liquidation gives notice of their appointment to creditors, holds at least one meeting of creditors and is required to report to creditors on an ongoing basis. These measures will seek to ensure that creditors are better informed as to the

The reforms will modernise Guernsey’s competitiveness as an ifc by providing greater clarity to investors and lenders

process and are able to engage with the liquidator. Invariably, in some company insolvencies, the creditors allege misconduct by the directors. Do the proposed changes provide any greater assistance in this regard? Liquidators will now have the power to require the production of a statement of affairs from the company’s directors. This will help enable a liquidator to understand more quickly and efficiently the state of the company’s assets, liabilities, debts, creditors and any security held. Additionally, the liquidator will be able to apply to the Royal Court for an order compelling individuals with knowledge of the company to be examined and to provide information. These new powers will sit alongside a proposed ongoing obligation on liquidators to report any findings or suspicions of misconduct on the part of the directors or officers of a company. This will assist the regulatory authorities in identifying delinquency on the part of company directors and officers, which in turn will help safeguard and enhance Guernsey’s reputation as a compliant and transparent jurisdiction. In addition to providing liquidators with the tools and mandate to identify potential misconduct, further changes have been proposed that will empower liquidators and administrators to apply to the Court to ‘claw back’ transactions at an undervalue and to set aside extortionate credit transactions. The latter concerns transactions entered into in the run-up to liquidation, by which the company incurs debt at rates of interest far beyond reasonable market terms. In addition to promoting the responsible conduct of corporate affairs generally, these measures are likely to assist in the recovery of assets for the benefit of creditors and shareholders. When will the changes come into force? The States approved the relevant Policy Letter outlining the changes on 31 March 2017. It’s expected the amending legislation will come into force by end of Q1 2019. n


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Talk to us about your wealth management needs Our offices are 37 The Esplanade, St. Helier, Jersey and Trafalgar Court, St. Peter Port, Guernsey. Get in touch or simply drop in, and we’ll be delighted to answer your questions and provide more details of our services.

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Call us on Guernsey +44 1481 733 900, Jersey +44 1534 708 090 or email Canaccord Genuity Wealth Management (CGWM) is the trading name of Canaccord Genuity Wealth (International) Limited (CGWIL) which is a wholly owned subsidiary of Canaccord Genuity Group Inc. CGWIL is licensed and regulated by the Jersey Financial Services Commission, the Guernsey Financial Services Commission and the Isle of Man Financial Services Authority. CGWIL has its registered office at Trafalgar Court, Admiral Park, St. Peter Port, GY1 2JA. BL0918

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Guernsey goes green Wayne Atkinson, Group Partner at Collas Crill, considers the new Guernsey Green Fund and how it could make a difference to the finance industry in particular, and the island more broadly GUERNSEY HAS ALWAYS been a green island. Agricultural history and planning practices have resulted in our little island remaining a blob of dark green amidst the blue of the Channel. I’m hopeful that our new ‘green funds’ regime will mean that Guernsey goes from a green dot on the global map to a global centre for green finance. As a finance centre with a strong private client base, Guernsey is already home to, or linked to, a number of major philanthropic initiatives. Similarly, many of our institutions are heavily focused on their corporate social responsibility. As such, applying an ethical base to financial matters is nothing new to us, though perhaps not something we toot our horns about loudly enough. Investors are now concentrating more and more on making investments with a positive social impact – investments that not only offer profitable returns, but which come with the added bonus of good ethical returns because of their sustainability, their environmentally positive nature, or the way in which they effect social change and wellbeing. A survey conducted last year by the Global Impact Investing Network revealed cumulative impact investment of US$22.1bn in 2016 by around 200 self-identified impact investors, who made nearly 8,000 investments in total. Green investment is just one facet of the broader impact investment sector, but because the green marketplace concentrates on a single issue (or cluster of issues) it’s easier to quantify an investment as green, compared with saying whether something meets the broader concept of ‘impact’. As such, the new Green Fund regime represents an ideal first step towards

Guernsey taking its place as one of the jurisdictions of choice for the broader impact sector. The new regime has been designed as an overlay for Guernsey’s existing fund regulations. This means any of Guernsey’s fund regimes can be used to form a fund which, by following the requirements for Green Fund status, can then wear the kitemark of being recognised as a Guernsey Green Fund. Certification requires the fund’s portfolio to be assessed. Effectively, 75 per cent of the fund’s assets must meet a set of specified green criteria – the assets must actually benefit the fight against climate change – with the remaining 25 per cent invested in a way that doesn’t actively damage this objective. The green criteria adopted represent an international standard, having been developed by the joint finance group of multilateral development banks. There is, however, scope for the green criteria to be added to as science and technology evolves. The certification can be provided either

I’m hopeful that our new ‘green funds’ regime will mean that Guernsey goes from a green dot on the global map to a global centre for green finance 22 november/december 2018

by an independent expert or by the fund’s Guernsey-licensed service providers. The kitemark, therefore, gives investors a degree of comfort that someone has made an assessment that a green fund does what it says on the tin, and isn’t a collection of ethically neutral (or worse) investments that have been ‘green-washed’. Whilst the Green Fund has, quite rightly, been praised for targeting the growing ethical and impact capital investment sectors, a number of other possible benefits shouldn’t be overlooked. First, this is a great opportunity for financial services in Guernsey to demonstrate the global good they do. Guernsey has, despite its long record of compliance with international standards, frequently been lumped with less effectively regulated jurisdictions in the sweeping and inaccurate category of ‘tax haven’. While the picture painted is often not one of the Guernsey that I (and many of you) know and love, it’s still unfortunately a picture that needs to be corrected and rebuffed globally. Initiatives such as the Green Fund put Guernsey at the table for discussions around the benefits of international finance, as opposed to just the perceived problems. Second, there may even be significant local economic and/or environmental benefits. As a small island community, Guernsey may represent an ideal test bed for new environmental technologies around recycling, localised renewable power generation, battery storage, electric vehicles and so on. Having a direct investment link into many of the start-ups that will develop these technologies and launch them into the world can only be a good thing – and it could turn into a great thing. Third, this rule set opens the door to other possibilities in the broader marketplace – a social development or impact variant of the same rules (with impact instead of green criteria), green bonds and so on. This latest initiative represents and relies on the effective application of two of the strengths on which Guernsey has long staked its reputation as a funds jurisdiction – strong but flexible regulation and highquality service provision. By seeking to apply those skills to this growing new sector, I hope we will change Guernsey, and the world, for the better. n BVI | CAYMAN ISLANDS | GUERNSEY | HONG KONG | JERSEY | LONDON

BL jersey Funds figures reach record high


atest figures collated by the Jersey Financial Services Commission (JFSC) show that the value of the funds industry in Jersey is at a record high. The net asset value of regulated funds under administration grew by £15bn during the second quarter of 2018 to stand at £296bn at 30 June. The statistics, for the period ending 30 June 2018, also show that all the alternative asset classes – which are central to the success of the funds industry – have recorded an increase since the start of the year. Private equity fund values rose by nearly £4bn to £86.5bn, and real estate increased by £2bn to £39.5bn. Hedge fund values increased by nearly £4bn to £54bn, and the combined total of infrastructure, credit and debt funds was nearly £10bn higher at £59.6bn. These latest figures on funds business complement the data issued by the JFSC in the summer, which showed that the

number of Jersey alternative investment funds being marketed into the EU through national private placement regimes (NPPRs) continued to increase (up five per cent since December 2017). Commenting on the trends, Geoff Cook, CEO of Jersey Finance, said: “These latest figures offer clear evidence of the industry’s resilience during challenging times and demonstrate its ability to grow and thrive. BL Jersey "It’s also worth noting these figures do not include the Jersey Private Funds, a fast-track regime introduced in 2017 – as at 24 September 2018, the JFSC had granted authorisation to 167 JPFs. “When reviewing the figures during the first six months of the year, there are a host of positives to acknowledge, and with finance employment figures approaching the highest ever level, coupled with more than 50 per cent of business flows now coming from emerging markets, the industry is on a strong footing.” n

Jersey records biggest offshore deal value in H1


ore money was spent on merger and acquisition transactions in Jersey than any other offshore jurisdiction in the first half of 2018, according to offshore law firm Appleby. The latest edition of its Offshore-i, which provides data and insight on M&A activity in the major offshore financial centres, focuses on transactions announced over the first half of 2018. Following a similar pattern to most of the world’s regions, the volume of offshore deals has fallen back from levels seen in the latter half of 2017, while value is on the rise. Jersey, meanwhile, experienced a six per cent increase in deal activity, with a 411

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GVA and GDP figures remain stable


he latest report presenting estimates of the size and performance of Jersey's economy in 2017 has been published by Statistics Jersey. The figure for total Gross Value Added (GVA) – £4.381bn – was essentially unchanged in real terms, up by 0.4 per cent on an annual basis. Construction recorded the strongest real-terms growth in GVA in 2017, while the financial services, hotels, restaurants and bars, and manufacturing sectors showed a GVA decline. Gross Domestic Product (GDP) was also essentially unchanged in real terms in 2017 – at £4.304bn – which was an increase of 0.4 per cent on an annual basis. The average economic standard of living of Jersey residents, as measured by GDP per head of population, decreased by almost one per cent in 2017 due to the real-terms change in total economic output being less than the increase in the resident population. GDP per head of population in Jersey in 2017 was £40,790. Over the most recent five-year period, the figure for GDP per head of population has increased by two per cent in Jersey, by seven per cent in the UK and by eight per cent in Guernsey. The full publication – Measuring Jersey’s Economy GVA and GDP 2017 – can be viewed at n

per cent increase in deal value. This was driven by the $62bn acquisition of Jersey-incorporated Shire by Japan’s Takeda Pharmaceutical – the largest offshore transaction of the first six months of the year. Jersey-incorporated companies were the target of 75 deals in the first six months of 2018, worth a cumulative value of $69.86bn. The jurisdiction was also home to two of the 10 biggest offshore deals of the half-year period – the Shire acquisition, as well as the $5.08bn acquisition of business-to-business event organiser UBM by Informa. n


Just one accolade in over 16 years of award-winning performance from Nedbank Private Wealth. For outstanding UK and international banking and investment services, visit











Nedbank Private Wealth is a registered trade name of Nedbank Private Wealth Limited. Nedbank Private Wealth Limited is licensed by the Isle of Man Financial Services Authority. Registered office: St Mary’s Court 20 Hill Street Douglas Isle of Man. The Jersey branch is regulated by the Jersey Financial Services Commission. The London branch is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registration No: 313189. The UAE representative office in Dubai is licensed by the Central Bank of UAE. Licence No: 13/191/2013. Representation in South Africa is through Nedbank Limited. Registered in South Africa with Registration No 1951/000009/06, an authorised financial services and registered credit provider (NCRCP16).

november/december 2018 25

BL Jersey

Jersey Finance hails newly introduced llc legislation


ew legislation in Jersey that enables the establishment of limited liability companies (LLCs) has the potential to significantly enhance business with the US, according to Jersey Finance. The Draft Limited Liability Companies (Jersey) Law, which was approved in September, allows LLCs to be established in Jersey for the first time. Combining the flexibility and privacy of a partnership with the protective limited liability of a company, LLCs have become popular across the world for a wide variety of uses, from SMEs and holding companies to fund structuring. In the US, they account for more than two-thirds of all new transparent business structures formed in the country each year. Jersey Finance believes that the introduction of a Jersey LLC will give US advisers, investors, businesses and fund managers a familiar option for crossborder structuring. Geoff Cook, CEO of Jersey Finance, commented: “In the US, LLCs are a structure of choice for alternative investment funds, with US advisers and managers being familiar with LLC


BL Jersey structures and aware of the benefits they can provide in terms of tax transparency." He continued: "We are confident that the Jersey LLC can provide an attractive proposition for US-based hedge fund managers, particularly in operating masterfeeder structures.” n

Geoff Cook to step down


fter almost 12 years in the role, Jersey Finance Chief Executive Geoff Cook has decided to move on. Appointed in 2007, Cook has been at the helm of the organisation, helping guide the island through the financial crisis of 2008/09 and playing a key role over the past decade in driving Jersey forward as an international finance centre of excellence. Cook will remain in his position as CEO throughout his notice period. The board is already engaged with the Appointments Commission to secure a successor. He said: “I am so proud to have been at the heart of this great organisation for the past 12 years, working with a fantastic team, key partners and members to grow our finance industry, an industry now recognised globally as a leading international finance centre. "It is an opportune moment for a new leader with a fresh perspective to help shape the future direction of our industry. I plan to transition to a non-executive career in financial services as a board director and adviser.” Jersey Finance's Chairman, Gunther Thumann, commented: “Geoff has been a brilliant ambassador for Jersey and is highly regarded by all those who have met with him locally and internationally. We wish him well in his new career and congratulate him on his many achievements over the years.” n

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Private wealth report published ersey Finance has launched its latest private wealth report, Flourishing Futures: Making Succession a Success. Written with law firm Bedell Cristin, the report sets out to address the challenges arising from the intergenerational transfer of wealth. In the next 30 to 40 years, it’s estimated this ‘great wealth transfer’ will pass down $30trn of wealth to today's generation in the US alone. The report focuses on succession planning and how existing trust structures, established more than 30 years ago, might be affected by the next generation of beneficiaries. Using examples from Jersey’s wealth sector and insights from Bedell Cristin partner Edward Bennett (pictured), it recommends actions trustees and fiduciary service providers can take in anticipation of the increasing influence of the next generation, including: ● Prepare a summary of the trust structure ● Initiate meetings with the next generation to discuss the trust ● Consider how existing structures meet the wishes of the next generation ● Ensure communication is carried out in a suitable way – via social media, for instance. Bennett said: “Next generation families tend to spread their wings further and are more likely to include step-children and longterm but unmarried relationships, whilst not all family members will share the same personal, commercial or philanthropic goals. They are more comfortable with technology – accessing information and communicating digitally, transacting online, being more open to fintech options." To download the report, go to or to request hard copies email n

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As the brussels-based CEO of Invest Europe, Michael Collins represents pan-european private equity, venture capital and infrastructure firms, as well as their investors. He spoke to Businesslife about how the industry is performing on the continent and the role the Channel Islands play

What’s your background and how did you get to where you are now? I joined Invest Europe – or the EVCA [European Private Equity and Venture Capital Association] as it was then – almost six years ago. Initially, I was Director of Public Affairs, responsible for all the work the association does in lobbying EU institutions. Before that, the first 15 years of my working life were spent in the UK civil service, where I dealt, in one way or another, with the EU. I spent a good chunk of that time in Brussels in the UK Representation to the EU. After 15 years in the civil service, I decided, in 2009, that I quite fancied seeing life from the private sector side of the table. I was lucky enough to be offered a job by Citigroup, and I worked as their Managing Director for European Government Affairs in Brussels for about three years, before joining Invest Europe. So, the thread that’s run through pretty much every single job I’ve ever done has been working with EU institutions. You mentioned the name change from the EVCA to Invest Europe – what was the thinking behind that rebrand three years ago? There were two main reasons. One was that the association and the composition of the membership had changed. We started out 30-odd years ago as a venture capital [VC] organisation. We’d grown to include private equity [PE] general partners, and then to include limited partners as well, and we’d started to attract infrastructure funds. So, the old name, EVCA, didn’t really feel like it fitted any longer with the members we were actually representing. The second thing we could see was a really strong trend here in Brussels, away from associations with acronyms towards names. Lots of organisations had gone

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In a nutshell, what does Invest Europe do? We’re a pan-European association for the private equity, venture capital and infrastructure industry. There’s a whole network of national associations, but we’re the only body that has a pan-European reach. We represent fund managers, general partners [GPs], limited partners [LPs] and service providers. We also lobby and represent the industry to political, regulatory and supervisory authorities; we represent the industry to wider stakeholders, including the media; and we’re responsible for raising the industry’s profile and managing its reputation. We’re also a major data provider on what’s going on in European private equity. The data we publish on the PE sector is, we think, the most comprehensive. We provide opportunities for the industry to get together – lots of networking events, seminars and so on. And we’re responsible for the industry’s professional standards. So, the code of conduct and the professional standards handbook that Invest Europe produces and oversees is at the heart of how this industry polices itself. The reports you’ve issued in recent months for both VC and PE in Europe show that figures are at 10-year highs. Why do you think that is? And will it continue? There are three principal reasons why we’re at 10-year highs for fundraising. First, I think there’s a general trend among investors for alternative assets. This has been driven in part by a prolonged period of very low interest rates. But even without that, there’s a need from many investor types – particularly pension funds – to find assets that can deliver real return over the medium to long term. Second, there’s the improved economic situation and the end of any meaningful

fear that we’re in a financial crisis. After the crisis we experienced in 2008/09, it was inevitable that investors would go for the safest of safe haven assets, and place a real premium on liquidity. But as they become more comfortable and optimistic about the future, capital will start to flow back into other assets. The third reason is performance. If you speak to investors about PE and VC, they’ve been pleased with the contribution it’s made to their returns. So, you’re seeing investors re-upping into funds – you’re seeing investors increase their allocations to PE and VC because the numbers are there. As for whether it will continue, well, we don’t have the final data yet for 2018, but the preliminary signs are that it’s going to be another strong year. Have you seen, or are you seeing, any trends in PE or VC – an increased interest in a particular sector, for instance? If you look at the sorts of sectors that PE and VC invest in, it’s actually quite stable. For VC in particular, the ICT sector has been the biggest for the past four or five years, followed by biotech and healthcare. As for buyout – the bigger investments into more well-established companies – there’s quite a lot of consistency over time.

the code of conduct and the professional standards handbook Invest Europe produces and oversees is at the heart of how this industry polices itself

Words: Nick Kirby Pictures: David Plas

from being the European Association for X or Y to a much snappier, sharper name. We felt that was right for us too, given the nature of the industry we represent. The name change was also driven by the need to speak in a more coherent way to the external stakeholder community we deal with here in Brussels.



interview Michael Collins

november/december 2018 29


A lot of the large financial institutions are realising that they need to be taking the fintech revolution seriously and potentially getting ahead of the curve

And how about private equity investing in financial services businesses – something we see a lot of in the Channel Islands? If you look at PE generally, and buyout in particular, financial and insurance activities (which is how we describe the sector) aren’t that big a part of the investment story. There are investments made into it – £5bn to £6bn – by the buyout sector each year. While I think there have been a lot of opportunities in some parts of the finance and insurance sector in recent years, it’s also been a sector that a lot of investors have been wary of because of the scale of the regulatory change that’s been experienced post-financial crisis. I also sense a concern that there are still too many unknowns about where debts and liabilities might be sitting. What’s starting to change is a growing interest in fintech as a place to invest. A lot of the large financial institutions are realising that they need to be taking the fintech revolution seriously and potentially getting ahead of the curve – because if they don’t invest in these new technologies, somebody else will come along and do so. If I were to make a guess about the future interest of PE and especially VC

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in finance, it would be at the fintech end, rather than in taking over traditional bricks-and-mortar financial institutions. It’s also worth noting that some of the largest PE houses have now developed their own credit fund businesses – using their private equity experience and the basic model of ‘LP investor/GP manager/fund’ to provide debt financing, rather than equity to businesses. With regard to the amount of money that’s slopping around at the moment, do you have any figures on dry powder? We don’t, no. That’s not a data point we collect and its actually methodologically quite difficult to come up with an accurate and reliable number on dry powder.

Anecdotally though, we’ve had a number of years of very good fundraising in Europe. If you look back over the past five years, fundraising has exceeded the level of investment pretty much every year – not by much in all cases, but every year a little bit more has been raised than has been invested. So that would suggest fund managers are sitting on some capital. But these are 10-year funds, or longer, so it’s not necessarily something to be concerned about. Fund managers know that ultimately they’re being paid by their investors to put capital to work and find good opportunities to invest in and deliver a return. They know that at some point the money will have to get out of the door and get to work in portfolio companies.

Consumer goods and services are always very strong, as are business products and services. Anecdotally, what I’m starting to hear from buyout firms and VC firms is that some of the larger fund managers in Europe are increasingly interested in the tech space. They’ve seen the success of venture-backed companies and are starting to get interested in investing in that sector themselves. So, what we might start to see over the next few years is an increase in the capital that’s going into the ICT sector from non-VC fund managers.


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Do you think it’s likely the UK will become a third country and have to get a passport or its own private placement regime, just like the Channel Islands? Yes, I do. We know from the AIFMD regime what the worst-case scenario is – that the UK becomes a third country.

When it comes to fundraising, most managers are reasonably sanguine about brexit – they recognise they will still be able to make contact with LP s

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That said, the third-country passport only exists in theory rather than in practice at the moment – and until the passport is available, there are private placement regimes. And there’s no reason to believe those will be switched off in March. The bigger concerns are for fund managers who have invested in portfolio companies pre-Brexit that are part of complex pan-European supply chains – the threat of 20-mile tailbacks on the M20 in Kent is potentially quite significant. But those are a subset of the broader issues that certain parts of the UK economy might face – they’re not really specific to PE and VC. On AIFMD, has that bedded down now or are there still hurdles and issues in a broader European sense? AIFMD is now pretty settled. But nonetheless, I think it’s still sub-optimal for the PE industry. We commissioned a piece of research earlier this year into the impact of AIFMD on private equity. And it confirmed what, anecdotally, we knew – that the benefits it was supposed to bring are pretty small compared with the cost of the Directive. We’re in a phase now, as we come to the end of the life of this European Commission and this European Parliament, where we’re waiting to see what the set of policymakers that come in next year will want to do – not just with AIFMD, but with financial market regulation more generally. All of the regulatory reforms that were going to be put on the table by the current Commission are now out there, they’re

being negotiated – and then we’ll go into a period of 12 to 24 months of wait-andsee, while we have elections and a new Commission is appointed. Looking more specifically at the Channel Islands – as an ‘outsider’, what do you think are their main strengths and weaknesses when it comes to funds? I’d say the biggest strength is their political, regulatory and fiscal stability. Anyone operating in or thinking about operating in the Channel Islands is fairly comfortable that they won’t face massive swings in the pendulum in terms of how they’re treated by the regulatory, supervisory or tax authorities. That’s not something you can say about every jurisdiction around the world. I’d also point to the value of the network that exists in the islands. There’s a real strength in depth of expertise, both from the service providers – the lawyers and accountants and so on – and the fund administrators themselves. In terms of weaknesses, I know from speaking to people on the islands that there are some capacity constraints. There’s clearly an expert pool of labour in the islands, but expanding that talent base doesn’t happen overnight – and that isn’t just for the senior roles, but for some of the more junior roles that need to be filled as you grow your activities. The challenge around recruiting people is something I do hear about time and again. Do you think the islands face any other specific challenges? I think questions around image and reputation are likely to remain for some time. The whole tax transparency agenda is going to stay high on the political agenda in the next few years. And although the Channel Islands have done a great job in demonstrating the substance of their regulatory regimes and that their tax regimes are up to standard, when you talk to some people here in Brussels, there’s still a bit of suspicion about any jurisdiction that isn’t part of the EU. And there’s a limit to what the islands can do about that. The islands will, both individually and collectively, have to continue to make sure they have the highest standards in every respect – regulatory and fiscal – as well as making sure that they keep explaining to policymakers in Brussels what they’ve done and that they continue to take the reputational threat seriously. Is this where the Channel Islands’ Brussels Office plays a role? Yes, and I think that’s a very successful and professional operation. My sense is that it’s an initiative that’s very timely. It will only become more important in this post-Brexit world where, with this whole blacklist/ greylist exercise, there will continue to

Let’s move on to Brexit. What’s your view on how it’s going to affect the pan-European fund industry? It all very much depends on the type of Brexit we end up with. The softer the Brexit – or the closer the UK remains aligned to the EU regulatory norms, the closer it is to the single market, the closer it remains to EU funding programmes such as Horizon 2020 – the lower the impact. The harder the Brexit – or the more chaotic, if you like – the greater the potential impact. The sense I get from speaking to our membership is that a lot of firms have done their contingency planning, have worked out what, at a high level, the implications could be of the different Brexit scenarios, and have done enough to be ready for those scenarios. When it comes to fundraising, most managers are reasonably sanguine about it – they recognise that they will still be able to make contact with LPs on the other side of the UK/EU line. It might get a bit more complicated, but it’s not going to be impossible to do so. My sense is that now the initial shock has worn off in the PE and VC industry, people will wait and see what the medium to long-term relationship will be between the UK and the EU, and factor that into the planning for their next fundraising.

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FACT FILE Name: Michael Collins Age: 45 Position: CEO, Invest Europe Background: Prior to working at Invest Europe, Michael was Managing Director, European Government Affairs, at Citi. From 2006 to 2010, he was the Financial Counsellor at the Foreign and Commonwealth Office in Brussels. And before that, he held a number of roles at HM Treasury, namely Head of the International Tax Strategy Team and Senior Policy Analyst.

be opportunities for others to make life difficult for the Channel Islands. Having a presence on the ground in Brussels not only makes it easier for the islands to react, but also shows a commitment to engaging with the EU. The symbolism of that shouldn’t be ignored. Luxembourg and Ireland are often seen as the main competition in Europe to the Channel Islands. Is that a fair comparison? There are parts of the PE/VC chain of activities where the Channel Islands, Lux and Ireland are looking to compete. But frankly, the fundamental difference is EU versus non-EU. That’s the real differentiator between Luxembourg and Ireland on one hand and the Channel Islands on the other. Consider Brexit. If you’re a UK fund manager who’s worried about the implications of being outside the EU, then you’re probably going to be looking at an onshore solution – an Ireland, a Luxembourg, a Netherlands domicile – for your management entity and possibly your fund as well. That, to me, is the most critical issue – there will always be people out there who want and need an onshore EU location for some of their activities. The other thing to say, of course, is that none of us know what the thirdcountry regime will look like in the future. I remember vividly the debate in 2008 through 2010 on AIFMD1, when thirdcountry manager access to the EU market was a very big issue. But it was really only the UK that was advocating for that most open, liberal attitude towards the country managers. So, AIFMD is going to be renegotiated in a very different

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political context than the one we faced for the current Directive, and the ability of the Channel Islands to be a location that provides easy access to the EU is going to be up for discussion again. And finally, if you had to pull out a few highlights of what might happen in the next 24 months, what would they be? The signs are that fundraising remains pretty robust. I think the general appetite of LPs for PE and VC is going to remain high. We might start to see some normalisation of monetary policy – interest rates starting to nudge up, for instance, which potentially gives LPs some new decisions to make on asset allocation.

Managers are going to have to work harder because there’s more capital in the market to find those really good investment opportunities

But even the most hawkish of central bank watchers wouldn’t expect interest rates to rise that far that quickly. So I think the underlying attractiveness of European PE and VC is going to remain high. Managers are going to have to work harder because there’s more capital in the market to find those really good investment opportunities – there’s more competition out there, you do see valuations increasing. That means managers are going to have to be particularly careful when making an investment about how they’re going to create value and how they’re going to deliver a return on that company when it comes to exit. The big unknowns are political and macro-economic. We still don’t know exactly how Brexit will pan out. We don’t know what the outcome will be of the European Parliamentary elections next year, or who’ll be in the new European Commission. And given that AIFMD2 is scheduled to happen on the watch of those people who are appointed next year, well, that’s a big set of unknowns that could have quite a profound impact on PE, both GPs and LPs. But overall, I think there are lots of reasons to be optimistic about the health of the industry – not just in the Channel Islands, but also across Europe. It’s a mature industry, it’s an industry with a good track record of delivering for investors, and it’s an industry that operates at high standards – both in terms of regulation and the professional expectations it imposes on itself. n NICK KIRBY is Editor-in-Chief of Businesslife


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Funds review


Funds review:

the Channel Islands march on

It’s been a good year for the investment funds industry in Guernsey and Jersey – not just in the volume of business transacted, but also in terms of innovation. Businesslife takes a look at some of the year’s highlights Words: Richard Willsher

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Funds review

FACTS AND FIGURES When it comes to how well the islands’ funds industries have performed in the past year, the numbers tell their own story. The latest statistics from the Guernsey Financial Services Commission (GFSC) show that the total value of funds is at a five-year high. As at 30 June, total net asset value reached £276.2bn, representing a year-on-year growth approaching two per cent – and an increase of more than £13bn (4.94 per cent) on Q1 2018. Just over £168bn of this was accounted for by Guernsey-domiciled closed-ended funds, with open-ended funds clocking in at just over £43bn. There was a definite surge in private equity fund business, which grew by almost £7bn to £112.7bn in Q2. Jersey had a similarly strong performance, with figures reaching an all-time record high. The net asset value of regulated funds under administration grew by £15bn during the second quarter of 2018 to stand at £296bn at 30 June. This is despite a dip in Q1, when figures fell slightly to £281bn, before rebounding. Likewise, the alternative asset classes recorded an increase since the start of the year. Private equity fund values rose by nearly £4bn to £86.5bn, and real estate increased by £2bn to £39.5bn. These figures may be boosted by additional funds launched under the Jersey Private Fund (JPF) regime, which aren’t included in the latest total. Towards the end of September, the Jersey Financial Services Commission had authorised 167 JPFs.

Exploring what’s been happening in more detail, we spoke to several industry professionals. First off, Andrew Boyce, a Partner in the Guernsey office of law firm Carey Olsen, which plays a leading role in bringing funds to market, explains that nine of the 10 largest UK private equity houses all have funds in Guernsey, many of which have created new offerings. “A lot of what I and our group have been doing is next-generation funds for existing fund promoters. This includes Cinven, Apax and Inflexion, among others, which have all raised new funds,” he says. “There’s also been a smattering of new fund managers coming to the market, so we’ve done a few what we call ‘new promoters’ here – first-time fundraisers. Those have been across the asset classes, but probably primarily in the tech space, and some venture capital.” Also in Guernsey, Paul Smith, Chairman of the Guernsey Investment Fund Association, says that the introduction of the island’s Private Investment Fund (PIF) regime has been well received. Launched in late 2016, it’s designed to allow for a speedy execution of regulated funds targeted at professional investors. Across the water in Jersey, Nadia Trehiou, a Client Director at offshore fiduciary and administration services provider Estera, points to the JPF as a significant catalyst for new business. “It’s been a really successful product for Jersey since it launched. It was, I suppose, a reiteration of legislation that we already had, but it’s now much more streamlined. There’s a 48-hour turnaround that the regulator is undertaking and we’ve seen that being very popular with clients, particularly in the alternative asset space.” It’s a sentiment that is echoed by Joel Hernandez, a Partner in the Jersey practice at law firm Mourant Ozannes. “The JPF regime has proved an enormous success since its introduction,” he says. “Our clients consistently cite speed of delivery, cost efficiency and flexibility of the regime as their main drivers. The range of fund promoter clients that have chosen this regime include well-established promoters of private equity, venture capital, real estate, infrastructure, credit and technology funds – although funds of any reputable asset class with no more than 50 investors can use the JPF. “The regime has also attracted its fair share of first-time fund promoters wanting to set up their fund in a cost-effective environment,” Hernandez continues. “Narrowly held co-investment structures also feature in the numbers. The fact that the JPF regime can also cater for marketing

november/december 2018 37


Funds review investors that have a stated preference for investing in sustainable, eco-friendly companies and projects. Smith also points to Northern Trust’s 2017 deployment of blockchain technology for the management and administration of a private equity fund. He believes that there will be further developments using blockchain in future transactions. At the time, the island’s Chief Minister, Deputy Gavin St Pier, commented: “As a jurisdiction we continually monitor new technologies, support businesses in developing ground-breaking new ideas and provide a supportive environment where products can not only flourish but be first-to-market.”

to European professional investors under the local national private placement regime [NPPR] has also proved very attractive.”

REITS A key feature of fund activity over the past year has been the listing of real estate funds on The International Stock Exchange (TISE). Rebranded from the Channel Islands Securities Exchange last year, its Group CEO, Fiona Le Poidevin, says its greater visibility has been a factor in attracting new listings, especially of real estate investment trusts (REITs). “We’ve listed a number of REITs over the past few years, but we’ve particularly seen growth since the Brexit vote back in 2016. The weakened pound has meant institutional investors saw the UK property/real estate market as an attractive option because effectively they were getting a 15-20 per cent discount on property in the UK. So there was suddenly a real influx of capital into the UK, and that was typically invested through a REIT structure because they’re very efficient, for large institutions in particular. “A number of our REITs do originate from the Channel Islands in terms of their place of incorporation, but increasingly we see those from England and Wales wishing to be listed on TISE here in the Channel Islands. I think this is a great endorsement of the regime, and ourselves at the Exchange.”


NEW OPPORTUNITIES As we’ve seen, the PIF and JPF have proved popular, but there are other new products and regimes that look set to produce growth for the islands’ fund sectors. Starting with Jersey, Mourant’s Joel Hernandez is bullish about the soon to be introduced Jersey Registered Alternative Investment Fund (JRAIF). He expects the JRAIF regime will focus on simplifying application and regulatory processes. “These changes will improve the launching of public funds for professional and/or institutional investors [those that target 50+ investors],” he says. “We expect this new regime will carry the hallmarks of the successful JPF regime – in being flexible, and that there will be no restriction on fund type or on the type of asset class. It’s likely to extend to both open-ended and closed-ended vehicles. “The main difference will be an emphasis on the regulation of the JRAIF’s manager as opposed to the fund. As we understand it, the Jersey regulator is working on the draft JRAIF Guide and this is eagerly anticipated.” In Guernsey, Paul Smith says the recent launch of the Guernsey Green Fund has generated a lot of interest as well. The rules for the scheme were announced in June of this year. The Green Fund designation, as outlined by the GFSC, represents ‘a scheme that meets strict eligibility criteria of green investing and has the objective of a net positive outcome on the planet’s environment’. Funds bearing the Green Fund badge are targeted towards

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the new JRAIF regime is expected to carry the hallmarks of the successful JPF regime

In a discussion of fund activity, it’s vital to keep in mind the investors who supply the money – the lifeblood of the industry. What’s clear from speaking to those involved in the islands’ funds industries is how global their reach has become. In May of this year, Guernsey Finance announced that, through the island, fund managers can access 80 per cent of global wealth. “What this means is that we’re recognised and known to these jurisdictions,” says Carey Olsen’s Andrew Boyce. “Guernsey has been used in structures to access investors or investments in the UK, Europe, US, Middle East and Far East.” Fiona Le Poidevin at TISE endorses this view. “Our investor base is very international. While typically, the islands’ investor base tends to be institutions, we see – particularly when it comes to REITs – sovereign wealth funds, pension funds and insurance companies from all over the world. “We’ve seen consortiums with clients from the Middle East, the US, Africa and Asia. Increasingly, we see family offices and high-net-worth individuals coming into these structures. So, some of them are more closely held by a smaller number of very large institutions or sovereign wealth funds, and then others are slightly more widely held by a larger number of very sophisticated high-networth individuals.” Considering this wide mix of investors now choosing the islands’ funds – and the range and flexibility of the regimes on offer to them – the industry seems to be in rude health. However, the islands are keenly aware of the competition from other jurisdictions and are continually innovating in terms of governance, scheme offerings and technology deployment. There’s bound to be rivalry between the islands, but together they add up to a global force in fund issuance, management and administration. This success attracts more business in a virtuous circle that looks set to continue for the foreseeable future. n RICHARD WILLSHER is a finance writer


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The thrill of the new Michael Johnson and Andrew Maiden, Directors of Fund Services at Intertrust in Jersey and Guernsey respectively, examine why emerging fund managers are becoming more successful and why the Channel Islands have benefited from a boom in launches from first-time, spin-off and emerging entities


expertise, their long history of domiciling funds and their global connections make them a popular choice for fund managers. This puts them in a strong position to capitalise on a global funds sector experiencing an interesting expansion that’s increasing the diversity and size of funds on offer. While well-established fund managers are continuing to grow and launch larger and larger funds, this activity is being accompanied by a steady flow of first-time, spin-off and emerging managers setting up their own firms. This new wave of fund managers has been partly driven by investor demand for the niche, tactical, added-value investment opportunities that the larger funds may pass over or simply not be aware of. The opportunities and rewards for both approaches continue to fuel interest and demand, and there is, therefore, a need to make sure that emerging fund managers get it right first time. As at September 2017, there were more than 590 first-time or spin-off venture capital fund managers raising capital worldwide, up from 470 in 2016. More than 31 per cent of the venture capital funds that reached a final close in 2017 were first-time funds, compared with 25 per cent in 2016. One of the key drivers of this growth was performance. When comparing the returns generated by 2006-2014 vintage venture capital funds, first-time managers generally outperformed the pool of experienced venture capital managers, according to research from Preqin. Investors and managers from the more

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mature markets of the UK, Europe and the US have a long history of using the Channel Islands to domicile their funds, especially for private equity, real estate and infrastructure asset classes. The islands’ track record and enviable reach makes them well suited to provide managers with a platform to access the Middle and Far East, which are attracting investment because of the emergence of investor demand for yield and higher returns.

BACK TO BASICS The most important areas that emerging fund managers need to consider when setting up their first fund are: ● Fund structuring – The basis of a successful fund is an appropriate

The financial aspects of running a fund are significant, and working with the right partners can help simplify this aspect and free up managers

structure, which requires a sophisticated understanding and analysis of the options. It’s important for emerging managers to consult legal advisers at an early stage to determine what issues may affect the structure of the fund. ● Fundraising – Fundraising can be a very time-consuming process so it’s important not to underestimate this alongside the effort and cost involved. ● Fund administration – Having the right day-to-day administrative processes, procedures and infrastructure in place is something many emerging fund managers don’t consider as much as other aspects of launching a fund, which can be a crucial oversight. With regard to administration, having a range of related services underpinning the fund can help to considerably minimise the risks and maximise success. One strategy frequently adopted by emerging fund managers is to outsource the administration to a trusted third party. ● Fund financing – Emerging fund managers need to consider whether they will need to use any financial products as part of their strategy and which provider would be best placed to provide these. It’s not just the financing itself that needs qualifying, but also the range of other financial considerations, such as insurance and escrow banking solutions. The financial aspects of running a fund are significant, and working with the right partners can help simplify this aspect and free up managers to focus on running a fund. ● Fund governance – Investors are increasingly requiring independent oversight of the affairs of their funds,

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which has driven an increased demand for directors unaffiliated with the manager on private equity and real estate funds. The diversity of directors’ skills and experience is of utmost importance. The Channel Islands, with their established regulatory regimes, local expertise and proven track records, can offer emerging fund managers the foundation to set up funds in an efficient and cost-effective way. In safe hands, managers are able to concentrate on the business of managing portfolios and selecting assets. In Guernsey, the Guernsey Financial Services Commission (GFSC) has a Private Investment Fund (PIF) classification, which encourages emerging fund managers to launch new funds in the island through greater flexibility and simplicity. Some of the benefits of the PIF to new managers are: ● No prescribed disclosures such as prospectus or Private Placement Memorandum (PPM), which significantly reduces costs and processing time during launch. ● Maximum 50 investors – a PIF can be closed- or open-ended and, while there can only be 50 investors, there’s no limit on the number of offers that can be made. ● Application process – a PIF can be registered and processed by the GFSC within one business day. In Jersey, the Jersey Private Fund (launched in early 2017) has proven very popular for emerging fund managers who want a costeffective, simple and efficient solution. In many ways similar to the PIF, the benefits for emerging fund managers are: ● Flexibility – over legal form and the

With expert advisers and high-quality service providers, new fund managers are in good hands in the Channel Islands

residency of Directors involved ● Speed – 48-hour regulatory authorisation process and no prior approval of promoter required from the regulator ● Simplicity – no requirement for auditor or PPM, for instance ● Size – majority of first-time funds generally close less than 50 investors ● Regulatory oversight – reliance placed on Jersey-regulated administrator The route to launching a new fund for a new manager is challenging. While many new managers are likely to be established in their field and have a good degree of relevant experience and insight, choosing the Channel Islands to domicile a fund can provide comfort throughout the process – from a concept to the launch and ongoing operations of a fund.

With the availability of expert advisers and high-quality service providers, new fund managers are in good hands in the Channel Islands. Intertrust offers a full range of tailored and holistic fund services – from set-up to administration – for private capital funds, including private equity, debt, real estate, fund of funds, infrastructure and venture capital. We have a dedicated, knowledgeable and global team of specialists, and a significant presence in key financial centres including the Channel Islands, Luxembourg, Ireland, Hong Kong, Cayman and the US. Our funds client list comprises some of the largest and most experienced fund managers in the world, as well as emerging fund managers. n


If you’d like further information on the services provided by Intertrust, please contact Michael Johnson at or Andrew Maiden at andrew.maiden@

For disclaimer and legal messages, please visit the Intertrust Group website at legal/disclaimer

november/december 2018 41


As the European Union seeks tighter legislation over substance, funds businesses in the Channel Islands are already rising to the challenge Words: Richard Willsher

‘SUBSTANCE’ IS A WORD that’s been rattling around offshore jurisdictions for a fair few years now. But it’s been thrown into the spotlight most recently because of the tax activities of some of the world’s largest businesses – those that choose to incorporate in low- or no-tax jurisdictions to avoid being taxed in other countries where they conduct business. Take the staggering case of 1209 North Orange Street in Wilmington, Delaware, an unassuming building that’s actually home – at least on paper – to some of the largest companies in the world. Apple, eBay, Walmart, Verizon, American Airlines, and more than 300,000 other business entities register their companies there, according to Business Insider. But it appears the gig is up. International bodies are starting to clamp down on such nefarious activity – and the Channel Islands are being caught up as houses are cleaned.

42 november/december 2018

Indeed, the Crown Dependencies (CDs) of Guernsey, Jersey and the Isle of Man are among 92 jurisdictions under review by the EU’s Code of Conduct Group (Business Taxation) – COCG – whose investigation mirrors the work of the Organisation for Economic Co-operation and Development’s (OECD’s) Forum on Harmful Tax Practices. Businesses that fall within the scope of their work need to demonstrate that they have adequate levels of employees, expenditure, available premises or adequate outsourcing to service providers. This is what they mean by substance. The types of businesses they are pursuing are those in banking, insurance, finance and leasing, headquarters’ activities, shipping, holding company activities, intellectual property (IP) and fund management. Tim Clipstone, Partner in the Guernsey office of law firm Ogier, believes the move is in fact aimed at transfer pricing among companies that trade across borders. This is very much in line with the OECD’s Base Erosion and Profit Shifting (BEPS) project. To that extent, funds and fund management activities are likely to be lightly affected compared with, for

example, an internet sales operation that routes its sales through one jurisdiction, while the bulk of its sales are in others. The good news is that the COCG recognises that collective investment vehicles – that is, investment funds, of which there are a large number in the islands – may collect funds from investors located in many different countries. This means reduced substance requirements should apply. The COCG is concerned, however, that there’s a general lack of local substance legislation in the islands. The CDs have agreed to address these issues by the year end. A joint consultation exercise concluded on 31 August and it remains to be seen what will emerge.


“We expect the rules will be introduced through new provisions in the tax legislation,” explains Jo Huxtable, a Partner at Deloitte in Guernsey. “It may require companies carrying on with relevant activities, to certify on their annual tax return that there’s ‘adequate’ direction and management of the company in Guernsey or Jersey and that there are ‘adequate’ numbers of directors and employees, expenditure and premises in the context of the specific activities carried on by that company. “Companies that aren’t able to certify in this way will face sanctions, probably in the form of financial penalties, potential exchange of information with relevant

Some, such as Richard Bray, Relationship Director at corporate governance and regulatory compliance specialist Active Offshore, are bullish about the possible outcomes. “I welcome this sort of legislation because it allows us to demonstrate how well placed we are in providing substance,” he says. “When we look at the sorts of requirements being put forward as part of this consultation, they are requirements and rules we’ve been following, I think, pretty well since the Protection of Investors law came out in the 1980s.” The new legislation could hit the statute books as early as 1 January next year. So who could be affected and how?

november/december 2018 43


firms that fall within the scope of the new legislation may need to make additional disclosures on their tax returns

EU tax authorities, and ultimately they may be struck off.” While funds themselves are likely to be subject to lighter touch requirements, fund managers may have more to prove. Andrew Weaver, a Partner at offshore law firm Appleby in Jersey, considers what this might mean. “There’s a thriving fund management sector in Jersey, and there’s been increasing and developing expertise here in Jersey in that sector,” he says. “I see no reason why, first of all, that trend shouldn’t continue. And second, it merely reinforces and demonstrates the substance that’s been developed here in response to increasing regulation. It’s not something we particularly need to be afraid of in this sense.” Justin Woodhouse, a Tax Partner at PwC in Jersey, adds that the substance requirements for companies carrying on relevant activities, such as fund management, will be aimed at showing direction and management occurring in Jersey through board meetings. In addition, businesses will need to demonstrate the existence of core income-generating activities allied to the relevant activity. “Proposed examples of core incomegenerating activities for fund managers are taking decisions on the holding and selling of investments, calculating risks and reserves, taking decisions on currency or interest rate fluctuations, and/or making other reports for government authorities and investors,” he says. In practical terms, Deloitte’s Jo Huxtable believes that the COCG doesn’t expect a one-size-fits-all set of rules to be brought in. This should mean that “sensible judgements can be made about the required level of economic substance relative to the company in question”, she says.

44 november/december 2018

“The guidance issued by the COCG indicates that the core income-generating activities of the company must be carried out locally,” she explains. “It’s common in the context of funds for the local fund manager to outsource investment advice to specialists in other jurisdictions. “However, this doesn’t diminish the role of the manager, which is required to review, monitor, challenge investment decisions and set parameters in order to meet its own responsibilities as manager. “This is a fundamental part of the Channel Islands’ investment management proposition. The expertise and governance available are arguably the primary reasons why the industry has developed here.”

ACCOUNTING ISSUES Other queries posed by Active Offshore’s Richard Bray relate to accounting and board meetings. He expects that firms that fall within the scope of the new legislation may need to make additional disclosures on their tax returns. He thinks these are likely to relate to the business activities involved and the amount and type of gross income, as well as expenses matters, which he doesn’t see as being particularly onerous. These issues won’t require a lot of new data or consume a great deal of time in order to comply, Bray says. “The first reporting won’t be required until November 2020, based on figures as at December 2019, so there’s a long lead-in period for us to get the figures ready.” As for board meetings, the key principle is governance and that businesses are being properly run. Consequently, adds Bray: “The main difference to the way we would normally run a licensed entity in Guernsey – whether

it’s an investment management company, a fund administration company or any others within the investment world – is the requirement of a quorum of directors to be physically present on the island for certain meetings. “We do generally look to make sure that the whole board meets in person at least once a year, which is fairly standard,” he says. “It may just require a little bit more coordination to make sure that we do have people physically present in Guernsey for more meetings than maybe has happened in the past. I think that’s about the only one stipulation I can see that might create any particular extra work to normal activities.” In summary then, although on the face of it, an approach from the EU’s COCG requiring new legislation to be put in place to prevent tax evasion and avoidance sounds like a rap across the knuckles, no one we spoke to for this article saw it in that way. Rather, the islands have received consistently high ratings for their governance practices and tax cooperation from the OECD and the EU and have grown a global reputation for their expertise in fund formation and management services. As we go to press, we don’t know what the result of the CD consultation will produce by way of amended legislation. What’s likely, however, is that the islands’ legislators will be able to demonstrate how nimble and quick they are to adapt to new regulatory requirements – seizing the opportunity to shine among the 92 jurisdictions the EU is examining. n RICHARD WILLSHER is a freelance business writer


Your single point of contact for tailored fund solutions. Your single point of contact for tailored fund solutions. • Fund structuring in all asset classes • Fund structuring in all asset including private equity, debtclasses and including private equity, debt and real estate real estate • Treaty analysis • Treaty analysis • Investor reporting • Investor reporting

• Investment trust company advice • Investment trust company (e.g. for FCA’s NMPI rules) advice (e.g. for FCA’s NMPI rules) • Real estate tax compliance • Real estate tax compliance • Transfer pricing and VAT • Transfer pricing and VAT

• CI tax implications including • CI tax implications including impact of new substance rules impact of new substance rules • Fund domicile advice • Fund domicile advice • Fund listings/transactions work • Fund listings/transactions work

Jo Huxtable, Jo Huxtable, Partner, Tax, Guernsey Partner, Tax, Guernsey D: +44 1481 703 308 D: +44 1481 703 308

Martin Rowley, Martin Rowley, Partner, Tax, Jersey Partner, Tax, Jersey D: 01534 824 200 D: 01534 824 200

Alex Adam, Alex Adam, Partner, Advisory, Guernsey Partner, Advisory, Guernsey D: +44 1481 703 214 D: +44 1481 703 214

© 2018 Deloitte LLP. All rights reserved.

© 2018 Deloitte LLP. All rights reserved.

november/december 2018 45


46 november/december 2018

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Re-engineering the fund administration model highvern Head of Funds Aidan O’Flanagan provides insight into the firm’s distinctive approach to fund administration POSITIVE MARKET IMPACT The Highvern Group launched its fund administration business earlier this year to fill a growing gap in the private capital market. Our distinctive business model has resonated in that market. Within eight months, we’ve established two new funds, transitioned five clients and built an expert team of senior professionals.

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BEST OF BOTH WORLDS Highvern’s business model is a culmination of the senior management team’s experience and market research analysis, which included feedback from investment managers and consultants that run service provider procurement exercises. Smaller owner-managed businesses may be associated with continuity and a flexible, high-touch, tailored service, but they may lack skills in technology and processes. Larger institutional businesses may be associated with technology and processes, but they may lack the continuity, flexibility and high-

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For more information, contact Aidan O’Flanagan, Director and Head of Funds on +44 (0)1534 480690 or

Highvern is a boutique, high-end fund and corporate administrator to the private capital sector. With a 50-year heritage, Highvern delivers a bespoke experience through market-leading technology, detailed controls and senior industry professionals.

NEXT GENERATION TECHNOLOGY Highvern has invested significantly in IT infrastructure and systems, including implementing AltaReturn, which has been designed as a fully integrated fund administration platform covering fund accounting, CRM and investor portal technologies. The platform allows managers to review the underlying records of their administrator on a near-real-time basis, providing full transparency and control. The majority of the fund administration market relies on systems that were created more than 20 years ago, most of which treat accounting as a secondary component. We see AltaReturn as the next generation of administration systems, allowing us to give control back to clients, saving them resources and, more importantly, time. n

november/december 2018 47


The year in

Ten years on from the financial crisis, regulation continues to be imposed on businesses operating in the financial services sector. At times, it’s felt relentless. So just what has played out this year, and How have the Channel Islands met the challenge? 48 november/december 2018

GDPR THE MOST BURDENSOME of this year’s compliance workload derived from the EU’s General Data Protection Regulation (GDPR), which was implemented on 25 May. It had businesses from all over the European Union and beyond, and across all sectors, scurrying around trying to figure out what to do. Then they had to send out millions of emails to fulfil their statutory obligations with regard to how much of our data they could keep, while gaining our permission to do so. For this reason, GDPR will probably go down as the issue that most distracted management and staff within Channel Island businesses this year. “GDPR is the one that’s had the biggest impact by far,” says Matt Sanders, a Group Partner at law firm Walkers in Guernsey. “Although it doesn’t directly apply to the Channel Islands, they’ve chosen to put in place an equivalent regime. People didn’t have much time. Although there’s a one-year transitional period, many businesses have UK and other EU customers, so they needed to be ready by 25 May.” Sanders adds that it wasn’t just about all those emails. “It’s about ensuring your data’s under lock and key, justifying your use of it, how long you hold it and where and how you store it. There was a heavy IT focus.” This meant, in many cases, a complete overhaul of databanks, to clean out unwanted or out-of-date material and decide if what was left needed following up. By common consent among people we spoke to for this article, the months leading up to 25 May were a major headache – although in the end, most businesses had done what was required to comply.

MiFIDII and PRIIPS The year began with both the Markets in Financial Instruments Directive (MiFID II) and the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation coming into force. Among the procession of regulation ushered in this year, MiFID II was a big one. Its aim was to bring greater efficiency, resilience and integrity to European financial markets, creating a level playing field in financial instruments across the EU. It covered every aspect of an investment firm’s business from authorisation, product creation, selling and trading, to execution. Even though the islands aren’t in the EU, affected firms were those dealing in investments and managing them, and those giving investment advice, such as banks, stockbrokers and financial advisers. The key point is that they must also be delivering these services to clients within the EU, including of course those in UK,


which is a major feeder jurisdiction for Channel Islands business. MiFID II was last year’s story, given that the work it produced needed to have been done before it took effect on the first day back after the New Year. And so too for PRIIPS. But, as Max Hilton, Founder of Clarus Risk, a risk management fintech firm that collects fund data and issues risk reports, says, many firms were less well prepared for PRIIPS. “We recognised that some firms were behind the curve in understanding what obligations they had to meet. Although this is an EU regulation, it affects people in the UK and it affects Channel Islands companies with European retail investors as MiFID defines them, which is very broad. “Many island companies may have, or have the potential to have, retail investors. Also, because it’s a European regulation, the Guernsey Financial Services Commission and the Jersey Financial Services Commission have been quite passive on the matter.” Hilton points out, for example, that a number of hedge funds and private equity funds with wholesale investment offerings found that they were deemed to fall within the scope of PRIIPS because their partners or management hold shares in their funds. The same goes for some local authority entities and public bodies. Consequently, they found that they had to produce so-called PRIIPS KIDs – key information documents – to enable investors to fully understand the risk of investing in them and enable them to compare competing products. Moreover, KIDs are also required where products are offered on a stock exchange, form part of funds of funds, or are among those offered by private banks that construct portfolios with other people’s products. Clearly, a quoted fund can’t be certain that retail investors aren’t buying its shares. Also, KIDs make it easier for platform providers to produce their own PRIIPS documents. Hilton says there are further stings in the tail. PRIIPS rules are quite prescriptive and based on historical performance measures. As the markets have been going great guns for a while, KIDs can mislead investors by offering too rosy a picture of what investors can expect in terms of risk and reward going forward.

AIFMD The Alternative Investment Fund Managers Directive (AIFMD) has, thankfully, proved a little less onerous than anticipated. Its provisions call for managers to produce reports covering a wide range of criteria, including investment profile, concentrations of risk within a portfolio, and the risk profile of individual alternative funds. Even though so many of the islands’ funds can be classified as ‘alternative’ – including real estate, private equity, infrastructure and other funds – Dr Andy Sloan, Deputy Chief Executive, Strategy, at Guernsey Finance, notes that only three per cent of EU alternative investment funds are distributed in more than three member states. “It’s always been the case that the national private placement regime [NPPR] is a proven, smarter and faster route to market,”

november/december 2018 49

Words: Richard Willsher




d i f i m he says. “Guernsey is fully able to distribute into the markets that managers want to reach through NPPR.” Walkers’ Matt Sanders agrees and points out that if thirdcountry status is achieved, funds would be subject to the same requirements as EU managers. “But that’s stuck in the long grass,” he adds. “Not much has been said since Jersey and Guernsey received news that there was no obstacle to their achieving thirdcountry passporting status. Maybe this is the reason AIFMD hasn’t had the impact it might have had. We’re a few years down the track with this now and people know what they need to do.”

Outsourcing In any case, firms finding themselves over-burdened by regulation now or in the future could always outsource their compliance obligations. Or could they? In principle yes, but in practice, maybe no. Malin Nilsson, Managing Director of Compliance and Regulatory Consulting at advisory firm Duff & Phelps, agrees that a regulated business can outsource some of its compliance, but it has to beware of appearing to be a ‘letter box’ entity. The key consideration, she says, is that the regulated business remains fully responsible and accountable to the regulator. “Any outsourced activity that, if disrupted, could affect the delivery of regulated activities, is within the scope of the revised regulatory outsourcing framework issued by the JFSC in 2017. This includes regulated activities such as client due diligence, and also non-regulated activities such as IT or accounting.” The benefits of lower staff costs and drawing on external excellence are certainly appealing. However, larger firms that can afford to keep their compliance internal, may feel they have greater control of their own activities. But, as Nilsson concludes, “Smaller firms that don’t, or aren’t able to outsource, may be at a competitive cost disadvantage. Conversely, however, they may also have a potential advantage in their client service delivery knowledge residing with a smaller group of staff.”

as the AML regime is already so strong in the islands, and widely recognised as such, EU countries are effectively playing catch-up



5AMLD and more For sure, the flood of new regulation and compliance duties is unlikely to abate in the foreseeable future. Just like taxes, once they’re on the statute book they seem never to be rescinded. Looking ahead, there are new measures in the pipeline. On 26 June 2017, the EU’s fourth Anti-Money Laundering Directive (4AMLD) came into effect. Now 5AMLD is waiting in the wings. It came into force on 9 July this year, but member states will have until 10 January 2020 to adapt their own legislation. Because so much of the islands’ business is with the EU, businesses there have to be mindful. However, several commentators told us that, as the AML regime is already so strong in the islands, and widely recognised as such by multilateral organisations, EU countries are effectively playing catch-up. Nonetheless, 5AMLD will reach across the regulation of virtual currencies; information on beneficial owners; use of prepaid cards; powers of financial intelligence units (FIUs) and supervisors; and due diligence for high-risk countries. It’s something to watch out for. In the islands themselves, there are several noteworthy developments. Frances Watson, a Partner within the corporate team at Mourant Ozannes, highlights a couple. The GFSC has updated the Registered Collective Investment Scheme Rules 2018 and the Prospectus Rules 2018, which took effect from 6 October 2018. This means that registered funds will be able to achieve a faster track to market based on representations and warranties given by fund administrators. At the same time, the new rules require all fund prospectuses for existing and new open- or closed-ended funds to be updated immediately if there’s material change to the fund. In any case, all open-ended registered funds are now required to review their offering documents at least every 12 months. All in all, then, the international financial services regulatory and governance juggernaut grinds slowly forward into its second decade. Despite sounds from the Trump administration that they are considering rolling back some banking measures in the US, the EU looks unlikely to follow suit. In Guernsey and Jersey, nimble reactions to regulatory moves elsewhere and the speedy adoption of their own high standards are key to underpinning the credibility of the jurisdictions among competitors around the globe. And they’re doing pretty well, according to reports from the EU and the OECD, among others. While some in the islands’ financial services sectors, as in other financial centres, may bemoan the amount of administration and compliance they now need to carry out, they also know it’s mandatory, not optional. What’s more, reputation is the lifeblood of offshore financial centres. High regulatory standards are key to the future prosperity of the islands’ finance sectors. n


RICHARD WILLSHER is a freelance finance writer


Reaching the minds other publications can’t reach





Diversity on funds boards goes beyond gender and ethnicity – having the right mix of people with a complete range of skills can mean the difference between success and failure

An alternative

view of diversity 52 november/december 2018


The Financ e person

IN 2007, NORWEGIAN paper manufacturer Norske Skog had a market cap of $2.5bn. Then its finances went through the shredder – newspaper circulation collapsed and book lovers were lured by the convenience of the e-reader. Five years later, the company’s market cap was down to $0.5bn. Investors brought in Charlotte Valeur, CEO of the Global Governance Group, as nominee director, to help turn the company around. She says she was struck by what she found. “The board had been made up of seven engineers. ‘Oh god,’ I thought. ‘How do they do accounts?’.” That’s not to cast aspersions on engineers’ numerical nous – it’s just that boards need people who live and breathe these disciplines. The board had made other critical omissions, such as having no one with the banking expertise needed to understand the urgency the company faced as the paper market became increasingly screwed. The company soon went bust, the board having slid slowly but inexorably towards a disaster it couldn’t see. “They were incredibly intelligent,” says Valeur. “But the vision wasn’t there.” The arguments for diversity are, by now, incredibly well understood. So much so, says Valeur, that people are bored of talking about it. “It’s eternally dull,” she says. Indeed, there’s no shortage of studies showing that leadership groups with a more diverse composition tend to be more innovative, make better decisions, manage risk better and generally perform better. When PwC surveyed directors in February 2017, for example, 91 per cent said diversity enhanced board effectiveness, while 84 per cent said diversity led to enhanced company performance. Valeur, who was recently appointed as Chair of the Institute of Directors, remains convinced that the board of Norske Skog could have saved the company if it had had the foresight to switch to producing other paper products –

take toilet roll, which remains a soft, strong and very, very long-term prospect. For Valeur, the lesson was clear: boards need diversity, not only in terms of the areas that tend to dominate the discussion – gender and ethnicity – but in technical experience and expertise too. “All boards should have legal, banking and accountancy skills, because every decision will have one of those elements in it,” she explains. “So when you have to deal with a convoluted legal document, you have a set of eyes at the table that have been trained in it and enjoy it – in accounts, people who can just pick out a number and see it’s wrong; and those on the banking side who understand capital structures and have the risk training. Those different mindsets make a big difference. If you’re all looking at a situation with the same eyes, you can’t see the opportunity or the risk until it kills you.”

THE BIGGER PICTURE Valeur’s view is shared by Helen Gale, a Partner at Deloitte, who says she’s often asked to comment on diversity because she’s “one of so few females in this position”. But she too is keen to move the conversation away from gender. “For me, diversity is about the individuals themselves and what they bring,” she says. “A strong board will have individuals with different points of view, who are able to challenge each other, listen to each other and take on board different perspectives. It’s that ability to challenge and the ability to listen. “You could have a board that’s technically

eting k r a n The M perso

diverse, that ticks all the boxes, but if the dynamics aren’t right – there’s an overbearing chairman and no one happy to question them – that’s not effective either.” And what applies to paper counts just as much in funds. Fund managers are investing in a wide range of assets that are vulnerable to the same global shifts and trends as anything else. Guernsey’s Code of Corporate Governance, section 1.3, states that boards should collectively comprise an appropriate balance of skills and experience, so the board as a whole is able to execute its duties effectively. Hence, board members should challenge themselves to ask if they bring the technical skills and diversity of thought that the board needs. Mel Torode, Operations Director at Estera in Guernsey, points out that Estera’s directors serve not only on fund boards, but on boards in the private equity, CLO, insurance and shipping spaces. “They can bring experiences from other industries to the table when discussing things like best practice, board efficiencies and how to deal with new regulation,” she says. And these days, with investors and regulators increasingly interested in areas such as ethics and social good, boards need to have a grasp of new and alternative ways of thinking. “There’s an obligation for boards to look annually at whether they have the right coverage,” says Wayne Atkinson, Group Partner at Collas Crill. “For a lot of funds, that assessment may be a one-hit deal – you set the strategy and it’s done. For others, it could be moving. A certain area, like impact investing, becomes more popular and you need to tweak both your investment strategy and your expertise to make sure you have the people who can do the job. “You want those people who are going to ask the highly informed questions that

november/december 2018 53

The per Legal son

Words: Dave Waller


The per Tech son

As well as balancing gender and ethnicity, and bringing in people with banking, accounting and legal expertise, we may soon see the boardroom door opening to younger people too

others won’t be able to ask. And you also need someone to be the lone voice in the room saying: ‘Sorry, explain to me why this is appropriate’.”

BREAKING NEW GROUND Another example, says Atkinson, is fintech. “If a tech investment goes horribly wrong, the lawyers in the courtroom will ask why you’d thought you were able to make that investment decision,” he says. “If you’re able to turn around and say you have two 20-something MIT grads on your board telling you the tech is brilliant, that will give you a level of support. But it will also make it more likely you’ll dodge the bullet and not wind up in that situation in the first place.” Sara Johns, a Partner at Ogier, advises boards and directors on the need to take a broader view of diversity. She says there’s

54 november/december 2018

still work to do. Many boards haven’t yet realised the importance of bringing on non-executive directors who understand both the technology and the regulation that surrounds it. She points to the Jersey Financial Services Commission’s recent clarifications on initial coin offerings as an example of how different jurisdictions have vastly different approaches to regulating emerging cryptocurrencies. Like spotting drastic shifts in paper consumption, this takes awareness and foresight. “You need to understand the regulator’s position ahead of time,” Johns says. “That takes knowledge and the passion and an interest in it, so you can say: ‘We may be fine in Cayman now, but the regulation is headed in this direction, with these implications in the future’. You have to be very aware, and very ready to understand what’s coming down the pipeline.” As such, Johns is struck by how, even now, it remains unusual for anyone under 30 to serve as a non-executive director. But while in traditional sectors such as finance you need the experience that comes with age, when it comes to these emerging, fast-moving investments, the most critical knowledge often sits in minds that may be 30-40 years younger than your typical finance board member. So, as well as balancing gender and ethnicity, and bringing in people with banking, accounting and legal expertise, we may soon see the boardroom door opening to younger people too. If, that is, the incumbents possess enough vision to recognise the need. “Anyone saying diversity is just box-ticking does so because they’re a boxticker,” says Charlotte Valeur. “I’ve started asking boards to give me the rationale for not having it. They all go silent. One guy got angry with me and said I made him feel like an idiot. That wasn’t my rationale – it was to make people think about why they do things the way they do. If you’re blind in certain areas, you’ll get killed. You won’t survive.” n DAVE WALLER is a freelance writer

Case study: Diversity in action Charlotte Valeur, who chairs Blackstone/GSO Loan Financing, actively seeks diversity on her fund boards, in order to protect the company and ensure that it’s governed properly. Valeur highlights one fund board that focused its investment strategy on Asia. “We specifically wanted to ensure the board had the input of Asian board members who knew the markets from the inside, and who knew the area in terms of culture and ways of doing business,” she says. “In addition, we sought those with relevant industry skills.” But, Valeur says, she always tries to avoid having more than two board members with the same skills or professional backgrounds. Boards should compile a skills matrix, which would also highlight areas that are lacking. Handled properly, diversity should happen seamlessly. “You could have years of discussions as to why you’re doing it, and it’s absolutely draining,” says Valeur. “That never enters my head. I’m just there to lead a company in the right way.”

Advertising feature

In profile: Andrew Bagot

With the retail sector continuing to evolve in the Channel Islands, Andrew Bagot, Managing Director at Alliance, explains why he decided to make the move to Jersey to expand and grow the food retail business WHAT DOES YOUR BUSINESS DO? Alliance was established nearly 10 years ago in Guernsey. Back then it was essentially a cash and carry-type business operating from an out-of-town site. Over recent years, we’ve turned it into more of a retail supermarket business to compete with existing rivals in the market – and it’s grown today into a strong pan-island operation.

WHAT MADE YOU CONSIDER JERSEY AS A PLACE TO MOVE TO? We had real success in Guernsey and there was clearly a market for what we were doing – we trebled our turnover in Guernsey and wanted to grow even further. We saw that the retail market was changing rapidly and we saw an opportunity in Jersey – we felt we had a proposition that would translate well into the Jersey market and that could meet customer expectations there too. We struck up a partnership with Tesco as our supply chain in 2014 and we moved to Jersey the same year. It was a rapid evolution, but the opportunity to expand into the island was too good to miss – we were able to draw on a familiar brand and we started with a great site in Sand Street. St Helier is a busy town with a frequent shopper culture, and the island has a growing population, so there are some really positive reasons for the business to do well.

WAS THE RELOCATION PROCESS STRAIGHTFORWARD? The move was relatively painless and Locate Jersey, who assisted us, were brilliant from start to finish. In this line of work, we always anticipated that business licences would take some time to obtain, but the overall experience has been smooth, and we were up and running very quickly indeed. We’ve also been lucky in that we’ve found some fantastic people in Jersey to come and work for us. There’s no doubt that those people have been fundamental to our success.

HOW ARE YOU FINDING LIVING IN JERSEY? I’ve been in Jersey now with my family for around 15 months, having moved over from Guernsey last year. I already knew the island well, but felt that if the Jersey expansion was to be a success, I really needed to be here to be close to the operation, to focus on the potential of the business, and be nearer to our people and our customers. So far, it’s definitely been the right decision, both from a business perspective and personally. Moving with family is always potentially tricky, but actually the kids have adapted really well to their new environment and we all love the lifestyle

here – and I still travel back and forth between the islands pretty regularly.

HOW DO YOU SEE YOUR BUSINESS EVOLVING? Since opening our first store about four years ago, we’ve expanded into more sites in town and opened our first out-of-town site in St Ouen. We’ve doubled our business in Jersey in the past two years alone and today serve around 40,000 customers a week, while maintaining a strong operation in Guernsey. So we’re in a good place. We see ourselves as a market challenger and, from scratch, we’ve built a platform where we now have an eight per cent market share. Retail is difficult at the best of times and the Channel Islands are no different, so we’re immensely proud of what we’ve achieved so far. Looking forward, we absolutely want to grow further in the islands, and we’re constantly looking at new premises and opportunities. We’ve got real confidence in our expansion strategy into Jersey. And by investing where it matters and scaling our business accordingly, we’re very positive about the future and our ability to continue to bring down prices for islanders. n This advertising feature was produced in partnership with Locate Jersey.

The move was relatively painless and Locate Jersey, who assisted us, were brilliant from start to finish

november/december 2018 55


The global mega-deals environment continues to thrive in the face of political and economic adversity, And the Channel Islands are right at the centre of the action

Go big or go home

Words: Jon Watkins


tensions around the world – Brexit in the UK and uncertain trade relations between the US and seemingly the rest of the world, to name just two – the global deal-making environment marches relentlessly on. The $2.5trn value of total mergers and acquisitions carried out in the first half of 2018 set an all-time record – fuelled in part by US boards seeking to either consolidate their industries or compete against a tide of powerful digital disruptors. But does that vibrant deal environment reflect the activities of non-M&A investment funds, such as private equity, real estate, infrastructure, and credit and debt funds – which have for so long been an important part of the Channel Islands’ offerings? The short answer is ‘yes’. According to the latest research from Invest Europe – both private equity and venture capital investment hit 10-year highs in Europe in 2017. And the first half of 2018 was also a record period for global private equity investments, with more capital invested than in any previous opening quarter, according to data provider Preqin. Recent mega-deals include Carlyle

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Group and GIC’s acquisition of the speciality chemicals business of Dutch paints giant AkzoNobel for €10.1bn in March. And in January, a Blackstone Group-led consortium struck a deal to buy a controlling stake in financial information business Thomson Reuters for $17bn. Mark Law, Managing Director, Alternative Assets, Asia-Pacific & Mauritius at Sanne, agrees that the past year has been a buoyant period. “I’ve been with Sanne in Asia for just over 12 months now and what we’ve seen is a really strong pipeline across the spectrum of asset classes, from private equity to real estate, infrastructure and private debt or credit funds,” he says. “If I were asked which asset funds are the strongest, I’d definitely say private equity and real estate.”

SPENDING POWER Felicia de Laat, Partner at Mourant Ozannes in Jersey, echoes that view. “We work with a number of established houses and they are raising big funds,” she says. “There’s an awful lot of cash to spend. You can see that the size of the deals is getting very big as well. Private equity has been particularly strong. I think there’s

increasing interest in infrastructure and also venture capital, which is an area that’s definitely seeing more activity.” So how do these global trends transfer to activity in the Channel Islands? Daniel O’Connor, Partner in the Corporate and Finance team at Carey Olsen in Jersey, says his organisation has seen a clear correlation. “If we look at the big deal sectors within the Channel Islands, there are key areas,” he says. “The first is obviously private equity. In terms of the big deals we’ve launched, Nordic Capital’s ninth fund was $4.3bn – 23 per cent above target and with 10 per cent of that $4.3bn coming from new investors. That’s definitely representative of an increase in private equity activity within the Channel Islands. “That fund is also representative of another trend,” O’Connor adds. “The fund started with a focus on northern Europe, but now has a global focus – and that delivers a message about deals becoming increasingly global. “We’re seeing bigger deals and successful managers being able to raise bigger funds. We’re also seeing existing managers branching out and doing things they

haven’t previously done – leveraging off their existing expertise to increase their presence in Jersey.” Nordic Capital’s ninth fund, while a symbol of the big deals we’re increasingly seeing, was dwarfed by the most significant fund transaction in the past 12 months – Softbank Vision’s venture capital fund, which raised more than $90bn and is widely expected to pass $100bn when the final figures are released (see box overleaf). O’Connor, who advised on the deal, explains that although it was a one-off in terms of scale – the next largest fund is around $15bn – it’s a symbol of the greater appetite for bolder activity and also of Jersey’s appeal. “This was, of course, an enormous deal,” he says. “But, again, it’s also a Jersey general partner and a Jersey fund, all regulated here. And it’s an existing company that’s branching out. Do I think we’ll see another Softbank? Probably not tomorrow. But they’ve been investing their capital very quickly, so I do think we’re going to see them continue to be active because the appetite is there to do more and to do new things.”



in focus: Softbank Vision

In the technology space, we’ve seen a lot of crypto deals – partly because it’s one of those areas where a disruptive technology is being used in a lot of different areas While private equity deals and those such as Softbank Vision have grabbed the headlines over the past 12 months, other trends have also emerged within the Channel Islands – including around which sectors are seeing the most investment.

TRENDING NOW “Of all the big deals we’ve seen on the islands over the past year, I’d say most have centred on financial services, healthcare, consumer retail and tech,” says Mourant Ozannes’ de Laat. “Those are probably the four key areas, and I’d say they’ve been focused heavily on the UK and the US.” O’Connor agrees. “In the technology space, we’ve seen a lot of crypto deals and I think we’ll see something big happening in the crypto space going forward. That’s partly because it’s one of those areas where a disruptive technology is being used in a lot of different areas,” he says. “We’ve also seen investment in financial services payment systems and enabling technologies in the financial services sector significantly increase.” But what do all these trends mean for the Channel Islands funds landscape going forward? De Laat is in little doubt. “The Channel Islands will continue to be an

58 november/december 2018

important player on the global scene,” she says. “The islands are very central and have a strong, stable government and regulatory regime. We have a lot of expertise here and that all helps. “We’re also good at doing complex work and I think it’s easy to do business here – we’re quick to market. If you are a Middle Eastern investor or a US investor, wherever you’re looking to do business, you’re looking for a central place and a stable place with a strong regime and high-quality service providers – and Jersey has all of that.” O’Connor adds: “What underlies all of those trends is that Jersey’s appeal continues to grow. It’s growing because people are looking for tax neutrality, they’re looking for tax transparency – because no-one is interested in jurisdictions that aren’t transparent anymore – and they’re looking for a place that’s stable. “Jersey has had the same tax regime for decades, with an English law base that everyone knows. People like that stability – and it puts the Channel Islands in a very strong position going forward.” n JON WATKINS is a freelance finance writer

Daniel O’Connor, Partner in the Corporate and Finance team at Carey Olsen in Jersey, advised on the Softbank Vision venture capital fund – a tech fund larger than any other on the planet, raising funds of around $100bn. The deal drew funds from major investors – including Apple, Qualcomm, Larry Ellison (the billionaire founder of Oracle) and the Public Investment Fund of the Kingdom of Saudi Arabia — and has been investing the money incredibly quickly, including a $9.2bn investment in Uber. “It’s certainly a big deal, but it’s also important because it’s in the technology space, and they’re looking to get into areas that will affect everyone’s lives,” says O’Connor. “They’re in the space of gamechanging technologies and they believe the next information age is already here. They want to build business that makes this possible. And that requires unprecedented large-scale investment. “So don’t be surprised if they make a move to raise more money in the future.”


november/december 2018 59






We have expertise in the administration of both traditional and alternative asset classes with a strong focus on private equity, real assets comprising of real estate, infrastructure and renewable energy, hedge and debt. We also specialise and have built expertise in more niche sectors such as FinTech including crypto and ICOs. We pride ourselves on the relationships we build with our clients, and as an independent, award-winning fund provider, we know we’ll be the perfect partner for you.


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Under new



They might be experts in running their own businesses, but a number of Channel Island firms are making their mark by managing certain functions for other companies Words: David Burrows

Alternative Investment Fund Managers Directive (AIFMD) on the continent was the rise of the management company (ManCo) – a third party that monitors risk and provides substance for a fund management firm. ManCos first registered on the funds industry radar following the arrival of UCITS in 2009 – EU regulation relating to protection for investors in equity or bond funds. However, the arrival of AIFMD in 2013 further strengthened the appeal of ManCos – the regulation this time applied to alternative investments too, such as

hedge, private equity and real estate funds. Both UCITS and AIFMD regulation were good news for ManCos in Luxembourg and Dublin and they were quick to seize the business opportunity offered. However, several Channel Island firms have since explored how the ManCo and Manager of a Managed Entity (MoME) model can work in the islands too. So, how successful has this been so far and what’s the rationale behind these moves? David Crosland, Partner in the Corporate and Finance team at Carey Olsen in Guernsey, is encouraged by the progress so far. “ManCos in the Channel

Islands are a slow burner – a couple of years ago there were none, and now there are five or six,” he explains. “So from that perspective, we’ve moved forward.” He makes the point that the attraction of ManCos in general, not just in the Channel Islands, continues to develop as the growth of substance requirements are becoming increasingly important as a result of AIFMD. Crosland asks: “Does a company have a board of directors that meets regularly? Does it have a genuine physical presence in the jurisdiction? Does it have

ONE OF THE KEY outcomes of the

november/december 2018 61


pool of talent within Channel Island ManCos mean that they’re able to be extremely competitive on price in comparison with other jurisdictions. So, what actually is a ManCo and what does it provide? Essentially, it’s an established entity that provides risk management services and gives substance and credibility to an investment manager – in this instance, in the Channel Islands. The ManCo reviews the investments and monitors the risks related to them. It ensures the investors’ requirements have been met and that the risk/reward ratio is suitable and the remit in terms of what the fund can invest in has been met. It also checks the level of liquidity. A ManCo is a third party, which provides essential support on an ongoing basis, allowing the fund manager(s) to do what they do best – invest money.


running a manco in the channel islands is a slow burn, and very much a complementary rather than a core offering

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professional employees who specialise in risk management?” As Crosland explains, fund providers do have the option to take the DIY approach, but it can be very expensive when the more cost-effective option is to ‘plug into’ a ManCo. It might cost £150,000 to £200,000 to set up on the island on your own and recruit the necessary people – compliance specialists, for instance. By comparison, a ManCo might typically cost around £30,000 and there’s no recruitment pressure – the skills and experience are on tap. James Tracey, Managing Director at JTC Group in Guernsey, agrees that the development of ManCos in the Channel Islands has been steady rather than rapid. “We’ve had our ManCo for over a year now and we’ve secured a couple of mandates to act for client firms. I agree that it’s a slow burn and is very much a complementary rather than core offering.” That said, Tracey is keen to stress that ManCos in the Channel Islands do offer distinct advantages. “We offer something different to Luxembourg and Ireland as we’re outside the EU,” he explains. In addition to this, the efficiency and

But ManCos aren’t the only solution for investment companies looking for essential support. Manager of Managed Entities (MoMEs) offer a different kind of service and they’re also establishing themselves on the islands. Whereas ManCos are more about outsourcing, MoMEs are more about incubating – helping a firm ultimately become a regulated entity in its own right. For some firms, the ManCo will be the preferred solution; for others it will be the MoME – it’s not a case of one being better than the other. The structure of a MoME is markedly different from the ManCo though. With a MoME, the client business will have a lot more control – for instance, in the choice of directors. They aren’t just handing control to a third party. There’s also more of a business plan associated with the MoME – typically that the company will eventually scale up to be a regulated business with substance. As Pippa Davidson, Managing Director at Praxis Fund Services in Jersey, explains, the MoME smooths the whole process and enables a structured transition. “Many companies want to move to the Channel Islands, but don’t want to bring a whole office with them. This is where the MoME comes in,” Davidson explains. “For


instance, a company that has a regulated business in London wants to move to Jersey and also wants to be regulated here. We help set up directors, help with compliance and even help with HR and payroll if that’s what they require.” Davidson adds that typically it would be three-to-five years before the company would go it alone and sever ties with the MoME. “Langham Hall was one of our clients and they’re now a stand-alone business – this took three-to-four years. Apex Fund Services [which recently announced the acquisition of Ipes] was also set up in this way.” Apex is due to go it alone very soon – once the Ipes deal has completed. Alison Creed, Director and Head of Funds for Fairway Group, explains why companies that are looking to become regulated in their own right, appreciate the benefits of MoMEs. “It’s partly a cost issue, but it’s also not easy for a company to establish themselves if they aren’t known to the regulator. A company such as Fairway is a known entity on the island and that helps.” Creed adds that MoMEs appeal to companies of all sizes, not just smaller businesses looking to establish a foothold in the islands. “One of our recent clients was a global tech company. They wanted to put their toe in the water, with the view that if things proved successful, they would put more staff in there. MoMEs can be used in different ways and are very much tailored to the individual business.”

James Tracey takes a similar line: “One of the key benefits of Guernsey is that we will continue to offer after Brexit what we offer now. We’re a stable, GDPR-compliant and AIFMD-compatible regime. It will be business as usual for us.” Brexit aside, the increasing demand for substance and high standards of regulation may boost business for ManCo and MoME providers in the coming years. “I think there’s potential for managers in jurisdictions such as Panama and the British Virgin Islands to want to be in a jurisdiction where there are higher minimum regulatory standards applied,” Tracey argues. This is starting to happen, he says, but could gather momentum. Even in uncertain times, the Channel Islands look well placed to prosper. n DAVID BURROWS is a freelance finance writer

BREXIT AND BEYOND Almost everything these days has a Brexit angle. So how will the UK’s expected departure from the EU affect ManCos and MoMEs? And with AIFMD passporting seemingly on hold – will the outcome have an effect on how funds are marketed through Europe? Pippa Davidson believes that, on the whole, Jersey is in a good place. “With passporting, we were top of the list, but then Brexit happened. What London becomes is key to how we react in Jersey. After Brexit, companies might look outside of the UK but also Europe too. Jersey is attractive as it sits between both – close to the UK but not in the EU.”

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Ingredients you’d expect. Investment results you wouldn’t By carefully combining our range of investment expertise and banking know-how, we’ve created consistent results for our clients. On-island investment and jurisdictional specialists. The global reach and access of our bank. And the industry insight that comes from real-world experience. See how we could create investment results for you. Call our local experts on Jersey: 01534 813418,* Guernsey: 01481 755491,* or visit

PLEASE REMEMBER THAT THE VALUE OF INVESTMENTS, AND ANY INCOME FROM THEM, CAN FALL AS WELL AS RISE, SO YOU COULD GET BACK LESS THAN YOU INVEST. *Call costs may vary. Please check with your telecoms provider. For business banking, we operate 08:00 – 17:30, Monday to Friday (UK time). Barclays offers private and overseas banking, credit and investment solutions to its clients through Barclays Bank PLC and its subsidiary companies. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No. 122702) and is a member of the London Stock Exchange and NEX. Registered in England. Registered No. 1026167. Registered Office: 1 Churchill Place, London E14 5HP. Barclays Bank PLC, Jersey Branch is regulated by the Jersey Financial Services Commission. Barclays Bank PLC, Jersey Branch is regulated by the Guernsey Financial Services Commission under the Protection of Investors (Bailiwick of Guernsey) Law 1987, as amended. Barclays Bank PLC, Jersey Branch has its principal business address in Jersey at 13 Library Place, St Helier, Jersey JE4 8NE, Channel Islands. Barclays Bank PLC, Isle of Man Branch is licensed by the Isle of Man Financial Services Authority. Barclays Bank PLC, Isle of Man Branch has its principal business address in the Isle of Man at Barclays House, Victoria Street, Douglas, Isle of Man, IM99 1AJ. Barclays Bank PLC, Guernsey Branch is licensed by the Guernsey Financial Services Commission under the Banking Supervision (Bailiwick of Guernsey) Law 1994, as amended, and the Protection of Investors (Bailiwick of Guernsey) Law 1987, as amended. Barclays Bank PLC, Guernsey Branch has its principal place of business at Le Marchant House, St Peter Port, Guernsey, GY1 3BE. Created September 2018. BD07454.


Is another

meltdown coming? On the anniversary of the Lehman Brothers implosion, Simon Smith, Head of Overseas Investment and Brokerage at Barclays in Jersey, examines the investment landscape THE 10TH ANNIVERSARY of the collapse

of Lehman Brothers seems to have exhumed many of the world’s most committed doom-mongers from their ever-shallow graves. ‘Too much debt’ remains their battle cry, and the end of quantitative easing their instrument of the financial/economic apocalypse. While these stopped clocks could be right this time, we explore some useful context points for investors below.

COMMENTARY VS INVESTMENT The first and perhaps most important point to make is that there is reputational asymmetry associated with calling recessions. Events in 2008 proved that it doesn’t matter how many times you’ve predicted the end of the world, if you’re saying it when the world economy does indeed career over the cliff, your reputation is enhanced. The reverse is true for persistent optimists, in spite of the upward trajectory of the global economy for the past few hundred years. Unfortunately for investors, indulging in perennial pessimism tends to come with significant opportunity cost. Those who fell for the last big run of recession predictions at the start of 2016 – when the economy was giving perhaps far greater cause for alarm than it is today – have missed out on substantial returns in global stocks. In this context, a good question to ask yourself when reading such commentary is whether the author has actually put their money where their mouth is? What is their track record, if indeed they have one?


WHERE ARE THE POTENTIAL PROBLEMS VS THE LAST CYCLE? One of the major problems with investing, and indeed forecasting, is that it isn’t just different this time, it’s subtly different every

time. This dampens the ability of history to provide us with perfect context, even if it can provide useful relief. In the last economic cycle, it was US households and global banks that were the main areas of excessive leverage. This cycle looks entirely different. The debt-to-income ratio in US households is now at a 40-year low, compared with a 40-year high in 2006. Meanwhile, thanks to a quantitatively and qualitatively different regulatory backdrop, banks are barely recognisable from their pre-crisis guise. Balance sheets are better insulated, funding is more stable, and oversight is more rigorous and transparent as a result of regular stress tests. That’s not to say there aren’t banks out there with problems or vulnerabilities, but those who argue that the developed world banking sector hasn’t changed its ways aren’t looking very closely. What we have seen in this cycle is a sizeable increase in non-financial corporate leverage. Companies have used persistently low interest rates to increase balance sheet leverage, both in emerging and developed worlds. Within this, quality has declined too. The lowest rated rung, the BBB-rated

segment, of the investment grade sector, is now proportionally as large as it’s ever been. Charts plotting the ratio of US nonfinancial corporate debt to GDP look particularly alarming to the uninitiated. However, we should probably question how appropriate a denominator US GDP is when talking about the US corporate sector, remembering that these companies are generally competing for a slice of the global pie. The debt figure looks less alarming when quoted as a percentage of corporate profits. When set against corporate assets, we see that leverage has been on a downtrend for much of this cycle, as asset values have grown faster than debt accumulation.

INVESTMENT CONCLUSION None of this is to say that there’s nothing to worry about – there’s always a multitude of concerns for investors to ponder. For a start, the details of the future will remain profoundly (and reassuringly) unknowable, however hard we try and mine the past. Meanwhile, the world economy is always contorting and stretching in ways that confound, confuse and provoke those watching. Predicting the precise moment when these contortions come home to roost for the economy and, indeed, capital markets is far from easy. We continue to point out that our preferred economic indicators, which have a decent, albeit not infallible, track record of calling downturns, continue to see no recession on the horizon. That means we have to find good reasons not to invest in a diversified portfolio – a portfolio that in our view should lean moderately towards stocks in both developed and emerging worlds. We still can’t find those good reasons just yet. n

Barclays offers private and overseas banking, credit and investment solutions to its clients through Barclays Bank PLC and its subsidiary companies. Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No.122702) and is a member of the London Stock Exchange and NEX. Registered in England. Registered No.1026167. Registered Office: 1 Churchill Place, London E14 5HP. Barclays Bank PLC, Jersey Branch is regulated by the Jersey Financial Services Commission. Barclays Bank PLC, Jersey Branch is regulated by the Guernsey Financial Services Commission under the Protection of Investors (Bailiwick of Guernsey) Law 1987, as amended. Barclays Bank PLC, Jersey Branch has its principal business address in Jersey at 13 Library Place, St Helier, Jersey JE4 8NE, Channel Islands.

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Not quite

coining it in

Jersey has dipped its toes in cryptocurrency waters, but its approach has been far more about quality not quantity – and that rings true when it comes to initial coin offerings IF YOU’D SOLD one single Bitcoin on

Words: Kirsten Morel

18 December 2017, you’d have received just shy of $20,000 for it. At the end of September this year, the same sale would bring in somewhere between $6,000 and $7,000. Go back to the end of December 2016 and Bitcoins were being traded for a much more modest $800 or so. At its peak, the market capitalisation of Bitcoin stood at almost $320bn, but it’s more than halved since then, reaching

$115bn at the end of September this year. There’s no doubt that anyone who holds Bitcoin in their investment portfolio has endured quite a ride. Volatility has been the digital asset’s principal characteristic since it hit the headlines five or six years ago. In keeping with Bitcoin’s reputation as a disruptive economic force and something that most regulators are struggling to get to grips with, aficionados saw a way for cryptocurrencies to be used to fund start-up

business ventures. In short, people realised they could sell their own cryptocurrencies in exchange for Bitcoin, Ether or any of the other major coins that had developed an economic life of their own. This simple, elegant solution to the issue of fundraising for businesses was seen as playing directly into the ‘cryptocurrency as a game-changer’ story. So, as the first initial coin offerings (ICOs) got under way, the dollars – which were usually denominated in Bitcoin or Ether – started rolling in. Ethereum was itself among the first ICOs back in 2014, raising $18 million in just six weeks. The trend caught on from there, reaching a peak with last year’s Filecoin ICO – Filecoin is a data storage network – which raised $257 million.

THE REGULATION CHALLENGE In the past couple of years, the ICO industry has gathered incredible momentum and billions of dollars have been raised. But the speed and scale of the sector’s rise, combined with a certain element of criminality in the form of scams and Ponzi schemes that have led to investors losing millions, means it has attracted the interest of national regulators. Estimates suggest that about 10 per cent of ICOs fall into this category, but many more simply fail, with failure rates put at anywhere between 40 and 80 per cent.

Some countries have banned them outright, including South Korea and, on the surface, China – although it’s still a major force in ICOs and harbours something of a shadow ICO economy. Other regulators have sought to find a middle way between protecting investors and encouraging innovation, but they’ve had problems doing so, not least because they’ve found it difficult to attribute characteristics to an ICO that would bring them under their regulatory purview. “An ICO is a means of capital raising,” says Dilmun Leach, Group Partner at law firm Collas Crill in Jersey. “The traditional way to raise capital would be a company issuing shares in an IPO or via a fund. ICOs are a new way in which investors buy virtual tokens. The significant difference is that in some jurisdictions, these tokens can avoid regulation.” Many regulators require ICOs to fall under the definition of securities in order for them to be able to adopt an oversight role. Aware of this, however, many ICO promoters have maintained that rather than being securities, the tokens they offer are in fact utility tokens that just enable access to the services offered by the business in question. In their view, this means that buyers of the tokens are simply buying services, albeit services that don’t yet exist because most

ICOs are a means of funding ideas rather than established businesses. Keen to diversify its economy into the tech space and, as a result, wanting to be seen as innovative, Jersey has sought to lead the way in the cryptocurrency space by building upon its reputation in the financial services sector. Doing so, however, means leading with caution because the island has its good name to uphold. “2017 saw a global boom in ICO activity and Jersey saw an increase in enquiries,” says Mike Jones, Policy Director at the Jersey Financial Services Commission (JFSC). “As a regulator, we want to attract business while also managing the risks effectively, and so we issued a risk warning in 2017 because there are risks attached and people need to think carefully before investing.” Alongside this risk warning, the JFSC has issued a Guidance Note to help prospective ICO issuers understand what they will need to do to come under Jersey’s regulatory regime. “The Guidance Note requires that any ICO [business] must be a company, have a Jersey-registered director, provide retail investor risk warnings, and annual audited accounts. It also provides a checklist of things that they can and can’t say in the prospectus,” says Jones. The regime is administered by Jersey’s

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Jersey isn’t a crypto free-for-all and only wants quality business. Some jurisdictions have rushed into the space

Control of Borrowing law and the company registry, with trust and company service providers, as well as the local director, being key to delivering the oversight the island wants.

GATHERING SPEED This approach means Jersey isn’t leading the way in terms of volume – the regulator has received scores of enquiries, rather than the hundreds or thousands received in Gibraltar, Malta or Switzerland’s self-styled ‘Crypto Valley’ of Zug. Importantly, this reputation-led, slower approach hasn’t slowed Jersey down too much. The island is home to the world’s first regulated Bitcoin fund, launched by investment manager Global Advisors, and hosts the world’s largest tech fund, Softbank’s Vision Fund. Jersey also launched its first ICO in 2017 – AAA Reserve, a not-for-profit coin designed to be a stable reserve currency to facilitate crypto-to-fiat transactions and vice versa. There have been a few more, though not many. But this doesn’t mean that Jersey is too late to the party – and it’s certainly ahead of Guernsey, which has yet to offer more than tentative, generic advice about using the jurisdiction for ICOs. “As crypto becomes more mainstream, we’re positioned to move with the times,” says Chris Griffin, Partner at law firm, Carey Olsen. “Jersey isn’t a crypto free-for-all and only wants quality business. Some jurisdictions have rushed into the space, but Jersey hasn’t, and that’s the place to be.” Mike Jones characterises the island’s approach as “mid-to-pro ICO activity”, acknowledging that “we want the good elements of this and so we’re focused on regulatory standards and wouldn’t want to treat the space any differently”. The fact that ICOs fall across financial services and technology means the islands are ideally suited to nurturing them and aren’t short of the necessary skills. “Jersey does have the skills to work with ICOs,”

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says Dilmun Leach. “We have excellent corporate governance and administrative expertise, there are significant digital businesses and a real community of tech experts, so we’re set up for dealing with high-tech industries.” Although not directly linked to ICOs, the recent signing of an MoU with Chinese crypto exchange Binance will boost Jersey’s credentials enormously. Under the deal, the firm intends to set up an exchange in the island and, as Chris Griffin points out, “it’s tremendously helpful to Jersey’s digital sector”. He continues: “Here’s an enormously successful crypto exchange that came to us wanting Jersey to help and it’s incumbent on us to provide that help with a view to diversifying and strengthening Jersey’s economy. It’s an interesting space and the more work we do, the more it becomes a self-fulfilling prophecy.” If Jersey’s work in the ICO sector does develop into a significant element of the economy, it won’t be because the island was the first-mover. Instead, it’s the more cautious path plotted by industry, the regulator and government working together that will have provided the opportunity for success. The one thing none of them can be sure about is whether or not cryptocurrencies are here for the long term. If they are, and that’s looking more likely as volatility begins to subside, then Jersey is set to benefit from its preparations. If, however, they turn out to be a flash in the pan, the island will have to continue looking for the next new pillar of its economy. n KIRSTEN MOREL is a technology and finance writer

What are ICO s ? ICOs are a method of raising capital to fund new or established businesses by issuing cryptocurrencies. In the first quarter of 2018 alone, more than $6bn was raised, eclipsing the whole of 2017’s fundraising in just three months. ICO stands for initial coin offering, but they can also be referred to as token generating events, the latter being a more neutral term that avoids the link with securities (token and coin are essentially interchangeable terms). Eighty per cent of new coins issued for ICOs are built on the Ethereum blockchain, a platform that enables them to easily operate the smart contracts that give many of the coins their functionality. The contracts can be used to verify transactions or enforce conditions, depending on the token’s intended purpose. Many, but not all, of the businesses that use ICOs are start-ups, often with little more than an idea and some wellworded marketing material with which to drum up funds. The fact that so many of the organisations behind ICOs aren’t yet real trading businesses means some investors have paid into scams. However, for those firms that are genuine and succeed in raising capital through an ICO, the fact that they’ve been able to secure funding up front, rather than further down the line, opens up new possibilities, enabling them to eschew the likes of venture capitalists and keep control of their own organisations.

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More than a token offering

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Stephen Ozanne, Senior Counsel at Walkers (Guernsey), examines whether token offerings are a new form of security and what opportunity they might provide for the Channel Islands TOKEN – OR COIN – offerings are a recent trend in the fintech sector. They have emerged out of the growing use of blockchain technology, the distributed ledger software that can securely record the ownership of assets, including digital assets such as Bitcoin. Tokens are a form of investment and have been used by businesses, particularly start-ups in the technology sector, to raise funds. It’s reported that over $1bn was raised by businesses via token offerings in 2017, with some reports suggesting that the market had grown over 800 per cent during the previous two years. The nature of tokens issued by a business can vary considerably, depending on the rights for investors that attach to the tokens. Many of the first tokens to be issued have since become known as ‘utility’ tokens. These typically give investors future access to a product or service. As such, it’s often been unclear whether utility tokens are a form of security that falls within the scope of securities and investor protection laws around the world. As a result, some utility tokens have been structured as a means to avoid securities regulation so that they have been quicker and cheaper to establish and could be more easily marketed to a wider range of investors, including retail investors. Further, a large proportion of early token offerings were issued by businesses set up by individuals with little or no experience in financial services, and who considered utility tokens to be an entirely novel type of investment, just because they were called tokens and were underpinned by blockchain technology. Regulators, however, have started to catch up with the trends in utility token offerings. In particular, the US Securities and Exchange Commission is taking enforcement action against token issuers who have launched utility tokens that fall

within the scope of US securities laws – which can include utility tokens whose value depends on the actions of a third party, such as the issuer. The other form of token that’s emerged is called the ‘security’ token. As the name suggests, security tokens are typically linked to an asset, and the value of the tokens is derived from that asset. In most cases it’s likely that security tokens will fall within the scope of securities and investor protection laws in the majority of countries as a regulated form of investment. While regulators around the world are beginning to clamp down on token offerings that breach securities and investor protection requirements, we have started to see a trend in token issuers deliberately structuring their tokens as security tokens to fall within the scope of regulatory regimes, in order to mitigate regulatory

it’s important to recognise that an investor who holds a security token doesn’t necessarily directly own the asset that’s linked to the token

risks and take advantage of the benefits that arise from using regulated products. When determining how security tokens are regulated, the question that first arises is whether the security tokens are a new form of security or not. It’s easy to be bamboozled by the terminology and technical jargon to think that since the technology used to create security tokens is new, they represent a new form of security. However, in reality, most security tokens are just a digital record of the rights of the holders of the tokens to the underlying assets that are linked to those tokens. On this basis, it’s helpful to ‘look through’ the tokens to the underlying assets and determine what type of securities those assets might be classed as, which in turn will likely dictate how the tokens themselves might be regulated. However, it’s important to recognise that an investor who holds a security token doesn’t necessarily directly own the asset that’s linked to the token. For example, the holder of a security token that’s linked to a share in the capital of a company doesn’t also need be a shareholder of that company. In such cases, it’s necessary to have an intermediary in place who will hold the share on behalf of the token holder. Here’s where the opportunity may be for Guernsey and Jersey. Both jurisdictions offer a competitive market in corporate services providers who can offer fiduciary services. Using a Guernsey or Jersey trust structure or corporate nominee could be the perfect intermediary to hold the assets linked to the tokens, which in theory could be issued by a business in any part of the world (subject to the usual anti-money laundering and counter-terrorist financing requirements and sanctions). Therefore, while security tokens are still relatively new, Guernsey and Jersey could offer some important services in this fast-growing market. n

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a Guernsey and global perspective following Recent acquisitions, the Estera team in Guernsey has grown to create a sizeable fund administration offering in the Channel Islands. Directors Norman Amey, Kevin Smith and James Christie highlight the funds services offered and discuss the benefits of being part of a large group How long has Estera been operating in Guernsey? James Christie: Estera has actually been around for more than 25 years. But we didn’t have much of a presence in Guernsey until last year, when we acquired Morgan Sharpe and Heritage Financial Services. We’ve now got about 100 people in Guernsey and we cover property, debt, private equity and listed funds investing in alternative assets, including a bit of a niche in renewable energy. Norman Amey: We’re already one of the top five fund administrators in Guernsey and we have huge amounts of experience in closed-ended funds. The funds market is a real priority for us. Our acquisitions of the two Guernsey businesses, a UK

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business and two Luxembourg businesses mean we’re serious about building an international funds presence.

already seeing the benefits of this, as Allegro’s business really complements our existing offering.

What are the benefits of being part of a large group? Kevin Smith: We operate in a total of 11 jurisdictions. The benefit of this is that we’re really well placed to provide a comprehensive service for clients, offshore and onshore, across the globe. We’ve also just announced that we’re acquiring Allegro, which is a licensed and regulated third-party fund management company based in Luxembourg. They have a great reputation and provide comprehensive services in the alternative asset space. It’s early days, and we are awaiting regulatory approval, but we’re

NA: Anybody that’s looking for a solution that works across offshore and onshore jurisdictions will now benefit from our improved access to Luxembourg. For some time, we’ve been able to provide corporate services to unregulated private equity structures through our existing office in Luxembourg. Now, with the acquisition of Allegro, we can also provide AIFM, ManCo and fund administration services from Luxembourg. JC: The funds industry is changing. At a macro level, things such as Brexit, as well as ongoing regulatory and compliance

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requirements, create both opportunities and challenges for companies like ours. We know it’s much easier to tackle all of these as part of a bigger group. Also, by being part of a global group we can help make our clients’ lives easier as we can offer a single point of client contact across multiple jurisdictions. Because we have such a broad range of services, we can be a one-stop-shop for clients. So, what fund services do you offer? KS: We provide a full service throughout the lifecycle of the fund. We try to have a thorough understanding of our clients’ businesses and what they want to achieve so we can tailor our services. These often include the set-up and ongoing administration of a variety of legal structures across several jurisdictions. Clients use us for their administration, fund accounting, compliance and corporate secretarial work. NA: We provide fund set-up, accounting, net asset valuation calculations, registrar and transfer agency services, together with company administration services across the whole spectrum of fund types. We’re used to large, complex private equity structures, as well as working with clients on emerging and innovative asset classes. We have a great reputation for acting quickly to set up and establish funds. Very often, when a fund is launched, the fund administration is the last piece of the jigsaw to be put in place and we have to fit into the launch timetable. We’re used to working to tight timescales to obtain the necessary regulatory Guernsey licences and listings. We’ve done it many times before, so we can provide fund applications to the regulator quickly and efficiently. JC: We’re also good at managing the takeon of new structures and existing structures transferring to us. We really appreciate the importance of a seamless transition for clients and fund investors, so we actively project manage the whole process. What help do you give clients with the technical side of fund administration? KS: We’ve worked in the industry for many years, so we understand what clients are looking for and give them technical support wherever it’s needed. We can offer forensic accounting and support with the orderly wind-down of funds, as well as risk management and due diligence services. These services aren’t needed every day, but we’ve got lots of experience and can

and meet our clients’ expectations, as well as the complex demands of each structure.

Anybody looking for a solution that works across offshore and onshore jurisdictions will now benefit from our improved access to Luxembourg

step in to support if required. On a more regular basis, we help clients meet the demands of the listing rules for a variety of stock exchanges with our company secretarial support. The team also helps with EU regulations as well as local ones. Our company secretarial services can really help ensure the smooth running of structures. NA: Technical accounting issues may need to be addressed and we’re able to do this for all types of funds. Helping our clients manage risk is also key. We offer risk management services for the Alternative Investment Fund Managers Directive [AIFMD] and the private placement regime and help clients establish the risk management network and reporting in multiple jurisdictions. What about depositary services? KS: That’s pretty simple – we provide efficient, cost-effective solutions that comply with AIFMD. We’re now able to offer depositary services from Guernsey or the UK, dependent on the client’s individual requirements. JC: It’s probably worth adding that because we’re independent, we can provide depositary services to existing Estera clients, as well as to fund managers who carry out their own administration in-house. We can also help fund managers who just need to have a segregated depositary service. We’re really flexible. We make sure our services are compliant with the Directive

What do you offer in the listings space? KS: As a jurisdiction, Guernsey has more non-UK listed entities on the London Stock Exchange (LSE) than any other jurisdiction globally. We have lots of experience in this area and service a large number of LSE-listed clients, including FTSE 250 companies. We administer funds that are listed on various exchanges, including the Main Market, SFS and AIM of the LSE and Euronext. Because we have a full set of services, we can provide seamless administration for listed clients and monitor for compliance with ongoing listing obligations of the relevant stock exchange. NA: It’s also worth mentioning that we have an excellent working relationship with The International Stock Exchange (TISE) and are a prominent sponsor, which means we are well positioned to guide issuers. We make sure all the conditions for TISE listings are met and we proactively liaise with them to pre-empt any issues that may arise. What’s next for Estera in Guernsey? JC: We’ve seen an uptick in enquiries for funds and have had more enquiries this year than in recent years because investors are sitting on ‘dry powder’ and are getting serious about the need to invest. Guernsey company law is very suited to fund structures and the local regime is really well regarded, so we think that Guernsey as a whole will continue to do well. There are huge benefits of being part of the Estera Group and we’re confident that our growth will continue. Our clients are already benefiting from access to a much broader range of relevant, quality services. We’re well versed in delivering multijurisdictional, bespoke solutions and are servicing more of their needs, while making sure that we maintain the same rigorous standards of client service. n


Estera is a world-leading global provider of fiduciary and administration services. We pride ourselves on providing excellent fund administration services across our offshore and onshore offices. Please contact us on (+44) 01481 742 742 or email to see how we can help with your fund administration needs.

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From music royalties and intellectual property to blockchain and a range of new geographical markets, there are many new ways for the Channel Islands to expand their fund offerings

What next for funds? Words: David Burrows

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FOR YEARS, THE Channel Islands have had strong funds offerings, attracting clients from around the world. They’ve traditionally done well in four areas – real estate, private equity, infrastructure and hedge funds. But assuming no offshore jurisdiction can rest on its laurels, do they need to up their game? “Yes,” is the immediate response from Geoff Cook, CEO at Jersey Finance, who’s keen to emphasise that fund offerings are already broadening on the islands. “The alternative investments sector has seen high growth over the past decade and a great deal of innovation. In a low-interest-rate environment, investors have inevitably been looking at wider options.” This can mean diving into uncharted waters. Recent developments include the launch of the Hipgnosis Songs Fund, a music royalty fund set up in Guernsey. James Christie, Director, Fund Services at Estera, who was involved in the Hipgnosis IPO, explains the attraction. “The Hipgnosis fund represents a new asset class in the listed fund sphere. It’s driven by developments in technology that have completely changed the way in which music royalties can be collected,” he says.

Craig Cordle, Group Partner at Ogier, who acted as an adviser on the Hipgnosis launch, is optimistic that these fund types will gain traction. “This is the first fund of its kind to be listed on the London Stock Exchange. The music royalties in which the fund invests are fundamentally intellectual property.” Cordle expects to see a continued rise in these types of quasi-fund structures – for example, single-asset vehicles established to purchase one asset or to make a single opportunistic investment. “For managers with a strong track record, investors are very keen to take advantage of such strategies,” he says. As a variation on the Hipgnosis theme, there are strong rumours within the islands that a fund vehicle focused on visual/image rights may soon be unveiled. The islands already have a track record in intellectual property (IP), so the challenge is to develop this further. There is certainly further opportunity in this space, according to Cordle. “IP often creates a regular yield – and income continues to be of key importance to many investors. Hipgnosis is a great example of creating a fund around a really


EMERGING OPTIONS There are plenty of other new areas of investment – Hipgnosis is one example and it’s worth remembering that Jersey famously launched the first ever Bitcoin fund a few years back. Christie believes there may be more to come in the cryptocurrency funds area, but he suggests fund service providers in the Channel Islands adopt a cautious approach. “The jury’s still out on cryptocurrency funds, but if the market continues to grow, with more cryptocurrencies being launched, then jurisdictions will increasingly need to take a view on them.” The Coinshares Fund I, launched in 2017, receives investment exclusively in Ether. Funds of this type will increasingly attract interest from less risk-averse investors, according to Cook. While the racier aspects of crypto funds might not have universal appeal, there are other, lower-octane ideas that are catching the eye. Mike Byrne, Chair of the Jersey Funds Association, is keen to expand on this. “There’s clearly an opportunity to locate impact investing funds in Jersey,” he says. “There’s the potential to develop an impact investing community here in the same way that a hedge fund community is established here already.” Cook agrees that the potential is there for growth in the impact investing space. “We recently carried out a review, which showed an increased interest in this area [from the high-net-worth market],” he explains. “Out of 1,900 funds, we currently have 30 social impact funds, but there’s a growing trend within the family office sector for these funds – investors want decent returns, but increasingly they want to see social good too.”

There’s the potential to develop an impact investing community in jersey in the same way a hedge fund community is established here already

Guernsey is particularly well placed to tap in to this increased appetite for socially responsible investing. The Guernsey Green Fund, launched earlier this year, signals the island’s intention to become the go-to international finance centre for environmentally responsible finance. It’s already been highlighted as an ‘emerging global contender’ in the inaugural Green Global Finance Centres index.

BLOCKCHAIN REVOLUTION The ‘game-changing’ impact of regtech and blockchain has been well documented in the media, but how will this help the Channel Islands’ administration of funds? “I would say that Jersey is well advanced in using bespoke technology, but there’s certainly some way to go,” Byrne says. “It comes down to the digital talent available and whether we have the nucleus like other locations.” There are success stories, however. The likes of Northern Trust in Guernsey have, in collaboration with IBM, applied blockchain technology to private equity administration. Byrne believes this is a step forward, but highlights the challenges ahead – particularly with alternative asset classes, which are less immediately convertible to new technology. Blockchain technology itself is also identified as an area that’s interesting fund managers on the islands. “We’re increasingly seeing innovative funds that are actively looking to invest in the blockchain/regtech sector,” Cook says.

GLOBAL PROSPECTS When it comes to global opportunities, the US remains an attractive market for Channel Island firms and, as Geoff Cook explains, a lot of effort has gone into increasing awareness across the pond. “We conduct periodic reviews, and in 2018 we took a fresh look at the US

interesting asset class. I’m expecting to see more funds investing in IP, and funds investing in new technologies – blockchain is just the beginning.” For a funds industry to flourish, much depends on the forward thinking of the jurisdiction in question. The Channel Islands have recently introduced new regimes – the Jersey Private Fund (JPF) and the Guernsey Private Investment Fund (PIF) – offering flexibility in terms of being open- or closed-ended and the number of asset classes that can be included.

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there’s a long way to go in terms of increasing awareness of Jersey in the US. But it’s a huge market, so even a slightly bigger slice of that market is significant

market,” he says. “The feedback from conferences we attended in Boston and Miami is that we are a reliable partner that helps US investors access the European market and we want to build on that.” As a statement of intent to developing US business, Jersey Finance is to launch a New York office in 2019. Byrne echoes Cook’s views on potential US business opportunities. He points to representatives of the Jersey funds industry undertaking extensive road trips in the US to increase recognition of what the Channel Islands offer compared with other offshore locations. “It’s hard and there’s a long way to go in terms of increasing awareness of Jersey in the US,” Byrne says. “But it’s a huge market, so even a slightly bigger slice of that market is significant.” Asia is also seen as a land of opportunity

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for Channel Island fund providers, particularly property-oriented funds. Byrne says: “Asia is a long-term growth story and there continues to be strong interest from investors there in UK property. Jersey is recognised as an appropriate holding structure by Asian investors who want access to the mature UK market.” Of the emerging markets, Africa is regarded as an attractive region right now. South Africa, Nigeria and Kenya are key areas of interest and, according to Cook, we may well see more funds introduced that tap into the growth potential there. “Investors in Africa would rather use a fund structured here, with the greater protection it offers. They are using us [the Channel Islands] as a hub to go into Africa,” he says. The African private equity market may be relatively new, but it’s one that’s attracting increasing interest. Byrne is equally bullish about the prospects there from a Channel Island perspective. He points to the level of commercial investing in Africa, and while that’s traditionally been through investment vehicles in Mauritius, Jersey could play a more significant role in the future. There seems to be no shortage of areas that could enable a more expansive fund offering – be it the US or Africa, IP funds, royalties or blockchain, social impact investing or Islamic finance. The opportunity is there for fund providers to innovate, supported by a stable and wellregulated environment. n

New fund types Intellectual property funds – essentially investing in an idea or concept created by the human mind. Typically protected by copyright – for instance, designs or musical composition. African private equity funds – regulated investment vehicles that allow private investment in African companies. ESG funds – focus on environmental, social and governance factors when selecting the companies that will sit within their portfolio of holdings. Crypto funds – a cryptocurrency fund is a pool of professionally managed capital, available to outside investors, where the majority of assets managed are invested in publicly tradable cryptocurrency assets. Islamic finance funds – funds that invest in compliance with Sharia law.

DAVID BURROWS is a freelance finance writer


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BDO and C5: stronger together

Antony Allen at C5 Alliance and Scott Nursten at BDO in Jersey explain how the two businesses have combined to create a powerful Channel Islands consultancy WHEN BDO IN Jersey acquired Channel Island technology business C5 Alliance earlier this year, it created a powerful, unified firm spanning consultancy, strategy, digital technology and managed services. It was a bold and unprecedented move by BDO in Jersey to complement its legacy accountancy firm services with a broad technological capability. The C5 acquisition followed BDO’s earlier acquisitions of regulation specialist Sator Regulatory Consulting and change management specialist Greenlight. Together, they provide BDO with the comprehensive skillset required to meet the needs of sophisticated clients competing in an increasingly complex business environment dominated by fast-paced technological, fiscal and regulatory change. The move also supports the Channel Islands’ wider ambition to become a digital centre of excellence. Antony Allen, Chief Operating Officer at C5 Alliance, and Scott Nursten, Chief Technology Officer at BDO in Jersey, explain how they’re integrating the two businesses. They also talk about BDO’s vision for the combined organisation. What made C5 such a good fit for BDO? Antony Allen: Both parties were talking the same language and had a similar approach to client engagement – as long-term partners and trusted advisers – which provides much greater value than a purely transactional relationship. Both organisations had achieved exciting growth through previous acquisitions and were attracted to the continued growth model that the larger group would allow. For C5, it’s also opened up an international network, and our local presence now has a global outlook. For example, we’re talking to the BDO firms in the United States and Canada and attending the global partner conference in Toronto. These two firms have been

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through a similar journey, which we can learn from. In addition, we have new opportunities to work with them to service some specific global client requirements. We were entrepreneurial and BDO were innovative – they brought that with them, as well as business acumen. For our staff, it was a compelling employment value proposition.

addition to BDO’s existing business. While our heritages are different, we share a consistent culture and values and a true belief that ‘success means more together’. This concept of ‘shared success’ is relevant for us both – in the context of the development of our own people, but also in terms of how we engage with and support clients.

Scott Nursten: C5 has an inspirational management group leading a first-class team of technologists and business professionals, who we already knew from working on shared client relationships. C5 attracts, trains and develops the best talent and works hard to support some of the most innovative and forwardthinking businesses operating in the Channel Islands and globally. Because of this, we knew right from the early discussions that C5 would be an invaluable

You work in many complex, technical areas. What can you do for clients? AA: C5 has historically offered both managed and professional technology services. But following the acquisition by BDO we are now delivering on our exciting vision, the underlying rationale for building this unified group. At the core of this vision is what we describe as ‘Advise, Build, Run’ – our new mantra focused on our clients’ needs and future strategies. Through our advisory teams, we can provide strategic insight to design business process and solutions. This combines seamlessly with C5’s professional and managed services technology teams, who deliver and build the solution and ensure it runs smoothly.

for us, technology is simply a part of solving issues for our clients and realising the business benefits. We’re focused on creating functional technology strategies

SN: There’s a lot of hype that surrounds technology, which is easy to get caught up in. Blockchain, artificial intelligence, augmented reality, quantum computing and the ubiquitous autonomous vehicle all vie for our attention. But really, how do you know which technology is going to succeed in the future? There are many factors that influence technology strategy planning, and reflecting on past trends helps make sense of the current hype. For us, technology is simply a part of solving issues for our clients and realising the business benefits. We’re focused on creating functional technology strategies, with solving the business issues of the day at their core.

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Antony Allen (left) and Scott Nursten It’s notoriously challenging to integrate two large organisations, each with their own culture and ethos. Following the acquisition, how has C5 organised itself to meet future client requirements? AA: BDO in Jersey is a large organisation, employing nearly 300 people in the Channel Islands. Within C5 Alliance, there have been a number of key hires and promotions to ensure a strong senior leadership team led by our highly experienced and recently appointed CEO, Scott Workman. Our continued growth is illustrated by our recent acquisition of ALX Training, a digital learning company, which enhances our offering to clients even more – we really are providing a complete end-to-end solution. SN: Technology has had an evolving role in business. IT departments are the backbone of businesses’ digital infrastructures, playing an essential role in driving technological innovation. However, IT strategy has traditionally been viewed as separate to business strategy. A decade ago, IT systems were thought of as the cost of doing business in a digital world. However, the world has moved on and the role of the Chief Technology Officer, Chief Information Officer and Chief Information Security Officer has become an increasingly important part of the business fabric. By combining the strategic advisory services our BDO colleagues deliver with the professional

and managed technology services that C5 delivers, we’re positioning BDO-C5 to be the ‘go to’ provider for technology strategy and platforms in the future. What’s the single most important tech issue that should be exercising the minds of Channel Island business leaders? AA: The impact of artificial intelligence is a hot topic – what will it mean in terms of staff and costs? Will businesses be left behind and disadvantaged or will there be even more data for organisations to process and understand? There’s the potential for so much more interpretation to occur seamlessly, but it will be resource-intensive to apply the analytics necessary to define future strategies. This is why data is a core practice area within BDO-C5. When handled correctly, data can become quite predictive and therefore helpful for strategic planning and decision-making. We have the expertise to framework client data to achieve valuable insights – without careful planning and specialist input, a lot of money can be spent without any business benefit. What makes this work exciting is the ability to make fundamental differences for people and businesses.

has the potential to drive greater value than any other area of IT. We can take clients on a journey to help them get increased value from data – our data solutions provide a mature set of services enabling clients to move away from focusing effort on just producing reports, to actually delivering insight into the future of their businesses, ultimately leading to performance and innovation. I firmly believe that the key to our clients extracting the most value from technology over the next five to 10 years comes from focusing on the trifecta of data, cloud deployment and cyber security. Accordingly, we’re focusing on each of these three practice areas as core elements of our technology strategy. n


For more information about the BDO-C5 offering, please contact:

SN: I echo the sentiment that ‘data is the new oil’, hence us spearheading our new technology strategy with our data practice. There’s a rationale for dedicated data services – when used effectively, data

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Asking the

Is improved training and a specific funds qualification the solution to a skills shortage in the funds industry in the Channel Islands? Words: David Craik

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DESPITE THE FACT that we’re living in an age of Brexit tension and uncertainty, it seems that the funds sector in the Channel Islands is keeping calm and carrying on. In Jersey, according to the latest figures from the Jersey Financial Services Commission, the value of regulated funds being administered reached a record £296bn at the end of June 2018. In Guernsey, meanwhile, net asset values of funds under management had increased 5.2 per cent to £276bn by that point in the year, according to the Guernsey Investment Funds Association. A jump in private equity and alternative asset class business, as well as a belief that the islands offer relative certainty in a volatile Brexit climate, have helped.

Yet despite this positive picture, not everything in the garden is rosy. The global funds and asset management industry is facing the struggle of a skills shortage. PwC’s recent survey of global CEOs in the asset and wealth management sector found that 71 per cent were ‘extremely concerned’ about the lack of digital skills in their industry. Back in 2016, more specifically, 72 per cent of global fund bosses said they were concerned about the availability of key skills in their businesses. Despite its current successes, the Channel Islands’ funds sector is also suffering from a lack of skills. The States of Jersey’s Employer Survey 2017 found that 27 per cent of employers were planning to grow their business over the next three to five

years, but that ‘accessing the relevant knowhow and skills’ was the main barrier. “There’s an issue with skills in all sectors on the Channel Islands,” says Michelle Morley, Head of Programmes at the GTA University Centre in Guernsey. “That’s because there isn’t much unemployment here, nor is there a huge pool of people to pick from to do all the jobs. “It’s an issue that’s being seen across the funds industry, particularly administration. I’ve spoken to employers in the sector and they tell me that there’s a need for more skills development.” Will Morgan, Managing Director of Guernsey-based firm Offshore, agrees there is a problem, but he believes funds firms are partly victims of their own success. “Because the funds industry is developing so fast, businesses are really stretched. Senior staff are working long hours and don’t have the time to take on or train junior workers,” he says. “Fund businesses are most likely to look for people who have company secretary or accounting qualifications to fill fund administration roles. They believe these


are transferable skills, but they aren’t necessarily right for the funds sector.” It’s certainly not an issue of failing to find people with the necessary qualifications. As Michael Johnson, Head of Funds for the Channel Islands at Intertrust, and a committee member of the Jersey Funds Association (JFA), explains, no vocational qualifications are needed to enter the fund administration profession.

RIGHT TYPE OF TRAINING “Perhaps employers will look at whether you have an accountancy qualification and/or prior experience by asset class,” he says. “There’s a gap in the fund administration sector, with very little specific training in the intricacies of the job. There’s plenty of general training in areas such as accounting, which fund administrators can go to, but they’re always left asking: ‘What does this all mean for the funds I look after?’.” Johnson sees issues around the need to develop more specialist skills as funds work becomes increasingly automated. “The regulatory and technological world

is advancing and there’s very limited specialist training,” he says. The JFA is trying to meet that demand by ramping up training provision through a series of CPD funds masterclasses. These half-day courses include one on the risks and regulatory challenges facing the Jersey fund sector, for example. “We’ve responded to the demands of our membership, who want us to fill in the funds training gap,” Johnson explains. “We’ll help develop more specialised employees in funds administration with more sophisticated knowledge, experience and abilities. Funds has become the biggest part of our finance sector and is expected to keep growing at a fast pace. Some of the other financial industries have strong headwinds, so we need to step up our skillsets and get prepared.” With regard to other training opportunities, the GTA runs workshops including refresher courses in fund administration and property funds. And on the mainland, ICSA, the UK-based Governance Institute, offers a Certificate in Funds Administration course, which looks

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funds companies want to see a qualification for new entrants and career changers, and for existing staff who want to fill in knowledge gaps

at areas such as the relationship between net asset value and fund performance, and different fund structures. In 2015, Paul Smith, Vice Chair of the Guernsey Investment Fund Association, called for a similar qualification on the islands. “There’s currently no qualification specifically for people coming into the fund administration sector that’s directly relevant to what they do. “I feel it’s important to provide such a qualification from an internationally recognised provider that’s also relevant to the Guernsey fund environment,” Smith commented at the time.

STAYING THE COURSE Stepping into that space three years on is a new global Certificate in Fund Administration qualification, from Birmingham-based training group CLT International. The organisation also provides access to specialist ‘bolt-on’ jurisdictional modules – including for the Channel Islands – which analyse the regulatory landscape in specific centres. The course looks at fund structures and strategies, accounting and valuation, taxation and regulation for those who

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work in fund administration or support. “What we’ve seen over recent years is a growing industry experiencing significant change as a result of increased regulatory pressure, and other economical and societal factors,” says Bill Howarth, Group Managing Director at CLT International. “The roles and competencies of those entering or already operating in the funds and fund administration industry have changed significantly for those performing back-office functions and administrative duties. There are limited qualifications or training programmes available to fulfil those training needs.” Will Morgan at Offshore has helped write the new syllabus focusing on the specialist Channel Islands modules. “We hope the course is relevant for people on the islands looking at our regulations and laws. Other qualifications have been too general,” he says. “We’ve worked with industry players and funds companies and they really see the need for this. That’s where the demand for change has come from. They want to see a funds qualification for new entrants and career changers, and for existing staff who want to fill in knowledge gaps.”

Michelle Morley of the GTA will help deliver the new CLT qualification in Guernsey. “There’s a real appetite for this among employers. It’s for new starters, but also for people looking to change career, so that when they go for a job they will have a qualification to show an employer,” she says. “The course will be specific to Guernsey or Jersey candidates and focused on issues that matter here.” Morley believes in-house training by employers is also important if the industry is going to ‘professionalise’ further. “Other sectors have their STEP qualification, such as in international compliance and antimoney laundering or international trust management, which provide pathways for people into work,” she says. “Employees need to be able to work towards a qualification and be supported in that journey by their employers. If a company has sufficient employees, then outside or internal qualifications can take place in-house. This, especially if the training is focused on the legal and regulatory concerns here on the islands, will help the skills shortages problem.” n DAVID CRAIK is a freelance writer


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Why funds need a

Words: Alexander Garrett

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digital edge


While certain parts of financial services are at the cutting edge of technology, the funds industry isn’t one of them – and it’s a situation that needs to change, fast

Spain. They’re meeting investors and one’s asked for the prospectus of one of your funds. The distributor has checked through his inbox and he’s not sure which is the most recent version. He’s also struggling to check the registration status of that particular fund in the jurisdiction – he’s not sure if he’s looking at the right spreadsheet. This is typical of the issues faced by asset managers and administrators on a daily basis, and the diagnosis is a simple one: being a technology laggard. While many areas of the financial services world have made dramatic strides in digitising over the past decade or so – think online banking apps on your smartphone, or retail investor portals – fund administration is only beginning to wake up to the potential benefits of digital technology. But it’s more than just an opportunity. The fund world is ripe for disruption and there are multiple drivers that create an imperative for fund managers and administrators to innovate or be left behind. These range from the threat of new competition from outsiders moving into the industry on the one hand, to the ever-increasing demands of regulators and distributors around the world for growing amounts of information on every fund. Ben Honeywood, Director of the Private Equity Group at KPMG in the Channel Islands, says: “Private equity is a cottage industry in many senses. It’s small and it’s always thought itself special and unique, and so it does things differently. From a back-office perspective, they’ve always been pretty slow to innovate.” Many fund management set-ups – whether or not administration is outsourced – do indeed continue to use emails and spreadsheets at the heart of many processes. These may be used for calculating asset values or financial reporting, but such an approach is prone to human error, duplication of documents, restricted access and other shortcomings. Fund management companies are inherently risk-averse and therefore slow to innovate, points out Jensen Nixon, CEO of Jersey-based tech R&D company WARM. There are reasons for this conservatism. In the low-volume, high-value world of PE, for example, there’s a natural tendency to focus less on the back office and more on the deal-making front end of the business – there’s a sentiment that ‘if it ain’t broke, don’t fix it’. But that masks a more fundamental issue – their reluctance to re-engineer their business and processes in the way that digital transformation really demands. Re-engineering your business for the digital world

brings in innovations such as automatic generation of management information and financial reports; automated transactions; and autonomous service options through a digital dashboard. One glance at Amazon should be enough to alert fund administrators to the possibilities, says Nixon. Tomorrow’s administration systems will need to be client-centric and portable, with any of the key parties – fund managers, administrators, investors – able to access the information they need from every kind of device anywhere in the world. The possibilities are only just starting to be envisaged, as nascent technologies become reality. A recent report by KPMG – Alternative investments 3.0: digitise or jeopardise – includes survey results from the alternatives and PE industries worldwide on preparedness for a raft of new technologies: new digital platforms, social media, application programming interfaces, big data, robotic process automation, blockchain, robo-advisers, and machine learning. In every instance, the vast majority of respondents are no further than the level of ‘awareness’, with a small minority close to decision-making or implementation.

BLOCKCHAIN BREAKTHROUGH Nevertheless, there are some success stories. In one well-known example, Northern Trust, in conjunction with IBM, has developed the first commercial deployment of blockchain in the private equity field. Tom Carey, a Partner at law firm Carey Olsen, was involved in the project. He explains the potential of blockchain, highlighting the example of a capital call – in which investors are invited to participate in committing to fresh investment – as one of its successful early applications. “At the moment, that’s a very manual process. Notices are sent out, often by email, and there are maybe 20 days to respond – some do, some don’t – and moneys have to be wired via the banking system, which takes a couple of days to settle before it can be pushed to the right place and investments made. With blockchain, most of this can be done automatically and instantaneously, the record-keeping is irrefutable and indelible, and there’s no scope for human error.” The fact that Guernsey was chosen as the test bed for this pioneering blockchain project reflects the quality of the island’s digital infrastructure and the fact that it’s a centre of excellence for professional funds administration, says Carey. The legal side of fund administration is also ripe for technology innovation, says Arne Zeidler, Managing Director of European law firm Zeidler Legal Services, which specialises in cross-border services. A year

SO, YOU’VE HAD a call from a distributor in

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The technological imperative

Administrators are embracing the need for innovation, but at the moment, the challenge is that they can’t find enough technical solutions to change their service delivery

ago, his company moved into software development. Zeidler says: “Administrators are embracing the need for innovation, but at the moment, the challenge is that they can’t find enough technical solutions to change their service delivery. So for us, it’s pushing at an open door.” One module developed by his firm enables fund managers to carry out due diligence on new distributors through a ‘self-service’ questionnaire. This has benefits for the fund manager, the regulator and the distributor – who avoids having to repeat all the same information the

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next time they’re asked to go through the due diligence process. The company has also deployed a natural language bot, drawing on structured data to build a knowledge tool covering 25 jurisdictions. It explains how the regulatory process works in each market. When the bot can’t give the client the required answer, it hands off to a member of Zeidler’s legal team. The firm has also developed a peer-topeer file system using IPFS (InterPlanetary File System), which ensures that the latest approved version of all regulatory documentation is available to all parties. Tech innovation in the funds administration world is already coming from several quarters – administrators, boutique service providers, big four accountancy firms, law firms and, increasingly, from fintech start-ups. Ben Honeywood says solutions will come from a combination of these sources, but start-ups have an advantage with talent. “Is working for a digital team in a bank as compelling an opportunity as a start-up, where staff are highly incentivised and the culture is aligned to make that business work?” he asks. One thing is clear: there’s no going back. “There will be no way to avoid using more advanced technology for many of these processes in the future – continuing with email and spreadsheets simply won’t work,” says Zeidler. Administration will need to be faster, more efficient and more client-centric, and able to handle far greater volumes of data. Business as usual is not an option. n ALEX GARRETT is a technology writer

If there’s one thing fund administrators need to do when they face up to the challenge of technology, it’s to stop tinkering with their existing processes and systems and to re-engineer their business for automation, says Jensen Nixon, CEO of St Helier-based tech R&D company WARM. “When fund administration businesses put in technology, they tend to use the same processes they’ve used before. They might get a little bit of extra functionality, but there isn’t much benefit,” he says. “It’s hugely expensive in consultancy time and administrator time, all to do pretty much the same thing.” The way forward, he says, is to build “straight-through processes” providing full autonomous solutions. The ultimate objective is a solution that offers “portability, reliability, scalability and maintainability, as well as seamless integration into other solutions”. This results in a fully digitised journey, from inception to completion, enabling competitive advantage for organisations that adopt this change.


Advise Build Run A unified firm providing consultancy, strategy, digital technology and managed services.

Solutions that will transform your business. Jersey: +44 (0) 1534 633733 Guernsey: +44 (0) 1481 722575 november/december 2018 85



the final frontier market you might never fulfil those childhood dreams of becoming an astronaut, but that doesn’t mean you can’t get a slice of the interstellar investment action

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SEVENTY YEARS AFTER the first monkey was sent into space (sadly it was a one-way trip), a new space race is upon us. In a report entitled Space: Investment Implications of the Final Frontier, Morgan Stanley estimates that the global space industry, which is currently worth around US$350bn, will expand to become a $1.1trn market by 2040. The report argues that in the short to medium term, ‘most of the industry is linked to internet bandwidth’ and satellite broadband will be the means to fulfil an exponential demand for data for everything from internet to autonomous vehicles. ‘However, over the longer term, the discussion expands to topics such as national security, research, deep space exploration, high-speed travel… even mining asteroids,’ it adds. Carissa Bryce Christensen is the founder and CEO of Bryce Space and Technology, a consultancy that specialises in space. She says the commercial space industry has been around for a couple of decades, mainly consisting of big satellites providing TV services, mobile, radio and internet services, commercial navigation systems (GPS) and imagery from remote sensing. “What’s new is that more recently there’s been a different type of commercial investment coming into space,” she says. “That is, commercial investment more aligned with venture capital, both from traditional VC firms and billionaires such as Elon Musk, Jeff Bezos and Richard Branson.”

BREAKING NEW GROUND Indeed, for those seeking to invest in space projects and companies, the industry is pretty sexy right now. Many firms are focused on getting satellites into space, providing wireless data communications, space tourism and space freight. The one with the highest profile is undoubtedly Elon Musk’s Space X, which has successfully developed reusable space rockets. According to Morgan Stanley, this has reduced the cost of launching a satellite from approximately $200 million to around $60 million – and the aim is to reduce it further, to $5 million. Space X also plans to launch its own satellite broadband network in 2019 and send someone to Mars in 2024. It’s even

The US government has announced plans to create a Space Force that will become the sixth branch of the US Armed Forces

for investors to look at. Indeed, according to Christensen, a lot of the satellite operators – the companies that buy the hardware and then sell services – tend to be pure-play, companies such as SES, Intelsat and Inmarsat. In addition, many companies are seeking to analyse the data coming out of these satellites and do something useful with it. Simon Drake, Managing Director and co-founder of Space Ventures Investors, which supports space start-ups, points out: “What we see in the mainstream media is usually rockets exploding, satellites falling to earth, and the prospect of living in space. When you look closer, there are many exciting things happening right now, and these things, and the people behind them, keep me excited and motivated. “My favourites are the next generation data-driven services, like how earth observation can help the agricultural industry, from detecting variations across wide swathes of land, right down to algorithms that can tell bee-keepers where to position their next bee hive.”

TO BOLDLY GO While the start-up pure-plays are entirely focused on space, there are also more established companies where space is just one of many sectors in which they operate. Numerous large, publicly traded defence contractors are also involved in the space industry, helping to build satellites and even launch them. For example, United Launch Alliance is a joint venture between aerospace and defence giants Lockheed Martin and Boeing that provides launch services for the US government. Boeing also builds satellites through its Boeing Satellite Development Centre subsidiary, while Airbus is in a joint venture with OneWeb to build its satellites. Other US defence contractors with an interest in space satellites include Maxar Technologies and Northrop Grumman. Commercial considerations aside, another key driver is national security, as countries seek a military edge from domination of space. China and India are starting to invest more heavily in space ventures – though their budgets are dwarfed by that of the US. As Morgan Stanley states: ‘With US military spending expenditures exceeding $600bn and global military expenditures exceeding $1.1trn, compared to NASA’s budget of $20bn, there is substantial room to increase investments in space.’ The US government has announced plans to create a Space Force that will become the sixth branch of the US Armed Forces

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Words: Chris Menon

anticipated that its rockets could challenge FedEx and DHL freight services, by dramatically reducing the time it takes to move high-value freight around the planet. Not to be outdone by Elon Musk, fellow billionaire Jeff Bezos, CEO of Amazon, has created aerospace manufacturer Blue Origin. The firm has developed reusable rockets and plans to offer orbital flights and help set up a base on the moon. Indeed, Bezos is on record as saying back in May 2017: “I think we should build a permanent human settlement on one of the poles of the moon. It’s time to go back to the moon, but this time to stay.” Certainly, space tourism is expected to be a growth area in the very near future. Sir Richard Branson has created Virgin Galactic to develop reusable rockets focused more on this area. Despite repeated delays to its launch, Branson has reportedly taken bookings for more than 600 passengers on his galactic carrier’s inaugural commercial flight – at $250,000 each. And according to Reuters, Blue Origin is doing likewise. While it’s a lot to pay for a five-minute trip in space, prices should eventually come down. Should you seek a longer vacation in space, Orion Span plans to open a space hotel in 2022. Prices start at $9.5 million (£6.7 million) per person for a 12-day stay in zero gravity, orbiting at 200 miles from the Earth’s surface. Stepping back from the future into the present, it’s in the aforementioned area of satellites that there’s at least a track record


– although whether that will end up as realistic a proposition as the Mexico border wall remains to be seen. More speculatively, there are long-term projects to mine the precious metals that reside on asteroids. US-based Planetary Resources is backed by Google’s Larry Page and Braintree founder Bryan Johnson, while in the UK there is the Asteroid Mining Corporation.

PUT YOUR HELMET ON But before you embark on a journey to boldly put your money into space, it’s important to balance the opportunities with the risks. Not only that, but the pureplay start-ups are private and can almost always only be accessed via venture capital funds focused on the sector. Three such funds identified by Bryce Technologies are Starburst Ventures, Bessemer Venture Partners and Seraphim Capital. London-based Seraphim Capital’s Space Tech Fund has £70 million invested in early-stage private companies, with a distinct bias towards the UK and Europe by virtue of proximity. James Bruegger, Managing Partner at Seraphim, explains: “We’re looking to back businesses that are collecting and communicating data about the earth from above. That includes satellites that are imaging the earth or being used to communicate with the earth. “It also includes airborne platforms for drones, and we’re investing in companies doing interesting things with all this data that’s being collected and communicated from above – for example, companies that are applying AI to the huge datasets that are being collected.” Bruegger’s intention is to make money when these portfolio companies are floated or acquired by rivals. One of his more significant holdings is ICEYE, a Finnish start-up company that provides earth observation data via a series of minisatellites day or night, regardless of cloud cover, to monitor issues such as oil spills, areas of flooding and crops. Sadly, only the seriously wealthy can access most of these specialist, high-risk VC funds. Yet, for those with an appetite for space, there are some quoted companies worth looking at (see box right). If the global space industry grows at the projected rates, there are huge opportunities to be had, both now and in the future. That said, investors would be advised to take as much care as any astronaut in charting a path through it. n CHRIS MENON is a freelance investment writer

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before you embark on a journey to boldly put your money into space, it’s important to balance the opportunities with the risks

We have lift off! Here are three companies offering exposure to space that investors might like to take a closer look at: Alphabet: Google currently has over one billion users. Improved global coverage from satellites will bring billions more online, increasing its internet penetration and driving up revenues and profits for its products: the Android ecosystem, paid search and YouTube. It also has a 7.5 per cent stake in Space X. Boeing: Boeing participates to a great extent in the satellite and launch components of the space value chain. It caters for customers such as ViaSat seeking communication satellites, and to NASA, which will use Starliner, Boeing’s reusable space capsule to ferry astronauts to the International Space Station. The company provides launches through the United Launch Alliance joint venture with Lockheed Martin. Inmarsat: This traditional mobile satellite services operator specialises in connectivity services for those in remote and difficult-to-access areas. For example, it supplies high-speed in-flight broadband services to airline passengers; data, broadband and safety communications to ships; and data services for those organising disaster recovery operations. It is a profitable organisation and is quoted on the London Stock Exchange.


Looking to make it big? We go beyond the headline-making business ideas to explore some of the less well known start-up opportunities for investors

sectors Six start-up ripe for picking 1. STREET FOOD AND POP-UP RESTAURANTS


The days of ‘street food’ meaning a half-cooked, greasy hotdog or lowmeat-content burger from a man with a silver trolley at a football match are long gone. Food markets have become big business – inspired partly by consumers’ desire for food from around the world, as we travel further and become more adventurous eaters. The street-food revolution was originally fuelled by ambitious chefs looking to give vendors restaurantquality food at a price they could afford in the wake of the financial crisis. Since then, family-run start-ups selling fresh, independent food that consumers can relate to have jumped on the bandwagon.

Now, daily street markets are a common sight in cities all around the world. And with a projected revenue growth of 3.7 per cent in the US alone over the next three years – bringing the industry total there to $1.7bn – food markets offer a great start-up opportunity. What’s more, the winners of the UK-based British Street Food Awards now go through to the European, and then world, finals – proving this is now a truly global industry. Pros: Very low start-up costs mean you can get going quickly and adapt your offering as you go. Cons: With many markets already established, the focus will be on finding a point of difference. Interesting fact: A sixth of Camden Market’s 72 stalls now cater almost exclusively to vegans, with seitan burgers and coconut pancakes providing tasty alternatives to the vegan falafel staple.

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Words: Jon Watkins

Whether you’re a seasoned investor, a serial entrepreneur or just gazing out of your office window thinking of breaking free to start up that long-dreamed-of business of your own, you’ll be interested to know where the opportunities lie. So, we’ve delved beneath the regularly talked about start-up sectors to bring you six opportunities you might not have considered – or even heard of!


2. CANNED WINE Barely have we recovered, if we have at all, from the debate about cork versus screw-top wine, than another contender enters the market – wine in a can. But while the wine connoisseurs dive to protect the ears of their Domaine Leroy Richebourg Grand Cru 1949 from this apparently ungracious upstart, the entrepreneurs among you would do well to consider the opportunities. Today’s consumers crave convenience – we’ve all arrived at the beach with a bottle of rose and no corkscrew – so a wine that offers a single-serve drink and can be carried and stored easily at festivals, picnics and the like will appeal to the millennial generation.

And while the concept of canned wine might sound like it’s in its infancy, plenty of players have already shown there’s money to be made. Nielsen estimates there are currently more than 60 brands in the US selling canned wine and that sales there rose to $32.3 million last year from $3.3 million back in 2014. Pros: This is still a relatively young market, giving ample opportunity to join early and stake a claim. Cons: You’ll need knowledge of the wine market and also the ability to get shelf space in supermarkets to really drive growth. Interesting fact: In 2017, E&J Gallo Winery’s Barefoot brand produced more than 12 million cans of its wine spritzers.

3D printing is shrinking supply chains, reducing development times and increasing the ability to adapt to customers’ needs

3. 3D PRINTING AND MANUFACTURING While the emergence of 3D printing may initially have felt like something from a futuristic fantasy movie, today it’s very much a reality – and it’s revolutionising manufacturing. Whereas manufacturing components used to be carved from a material, now they can be ‘printed’ from thousands of minuscule layers. The result is that 3D printing is shrinking supply chains, reducing development times and increasing the ability to adapt to customers’ needs. With the right technical skills and equipment, just about anything can be 3D printed, from auto parts to kitchenware – which means a start-up 3D manufacturing firm can be a supplier of component parts to other businesses or a manufacturer in its own right. Lantos Technologies, for example, was spun out of a mechanical engineering

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lab at MIT. It initially developed its 3D scanning system for commercial use, but has since become a manufacturer and seller of earpieces – demonstrating the opportunities to be either a supplier or a seller of products… or both. The research group MarketsandMarkets expects the 3D printing industry to grow to $32.78bn by 2023. Pros: Ability to produce at volume and at reduced cost will appeal to clients. Cons: Need to stay on top of legal developments such as copyright. Interesting fact: 90 per cent of all jewellery is made using 3D-printed moulds.


4. INFLUENCER AGENTS The worlds of reality TV and social media have brought many – good and bad – changes to modern-day popular culture. One is the rise of the social media ‘influencer’ – a much-followed ‘celebrity’ or


5. ALTERNATIVE PROTEIN PRODUCTS Better education and increased media exposure around healthy eating have pushed the issue of diet higher up the consumer agenda. According to PwC, nearly half (47 per cent) of 18- to 34-yearolds say that they have changed their eating habits towards a more healthy diet over the past year. That’s increased demand for alternative protein products – be it a vegan milk substitute made from peas, cricket protein, or meat-like products made from plants. To make waves in the market, you’ll need technical knowledge of food production and a clear product message to help you cut through the noise. However, there are benefits to be had if you can do so. A report

other known figure who, through their high numbers of social media followers, can make money from promoting products or services. Influencers charge brands or advertisers for a picture-led Instagram post. According to the Financial Times, ‘an influencer with 100,000 followers on Instagram can charge around £2,000 per picture, while celebrity influencers with between four million and 20 million followers can charge up to £13,000’. The most successful will make seven figures in a year. All of these people require agents to find brand affiliations, negotiate deals and create the content for posting. So, if you enjoy mixing in celebrity circles and cutting deals, then this could be the start-up area for you.

Pros: Little start-up costs and a big pond of rising influencers to fish from. Cons: You’ll need to build relationships with influencers and show you can help them make money. Also, a decade-long study by Offenburg University of Applied Sciences in Germany revealed that for every major player in the US, there are 27 earning less than a McDonald’s worker’s salary as an influencer. Interesting fact: YouTube gaming star DanTDM, or Dan Middleton, is one of the highest-paid social media influencers, bringing in around $16.5 million per year, according to Business Insider.

by the farming investment initiative FAIRR suggests the market for alternative proteins will expand by more than eight per cent a year by 2020, reaching $5.2bn. So, if you think you’ve got the ability to create bleeding meat-free burgers or milk made from peas, this could be your recipe for investment success. Pros: Rapidly growing business area that can genuinely be started at home. Cons: An already competitive marketplace will require innovative products to break through. Interesting fact: Soybeans are considered a whole source of protein – they provide the body with all the essential amino acids it needs.

6. GREEN AND RENEWABLE ENERGY Being a wind turbine service technician is officially the fastest-growing job in the US, according to the Bureau of Labor Statistics. Solar photovoltaic installers aren’t far behind – a sure indication of the growing focus on green energy generally. So if you’re looking to invest in or build a start-up in any sector, this could be it. Renewable energy is still a relatively small industry, with wind supplying just 5.6 per cent of electricity on the US grid and solar generating 0.9 per cent – so it’s a great area for entrepreneurs. Generous business tax credits around the industry – in the US these are up to 30 per cent – have further helped drive interest

It’s certainly a growing industry. According to eMarketer, a survey from WhoSay found that 70 per cent of US agency and brand marketers agreed that influencers’ marketing budgets would increase in 2018. Meanwhile, 89 per cent said influencer marketing can positively impact how people feel about a brand.

in the sector, and start-up opportunities are varied. From investment in wind farms and renewable energy plants at the top, other start-up successes are transferring waste into fuel, creating marketplaces for the distribution of unused energy, and building facilities to store hydrogen. Pros: Still a relatively young market with lots of scalable opportunities. Cons: Big players will be dominant at the high-end of the market, so you may need to seek opportunities lower down. Interesting fact: The main forms of renewable energy are solar, wind, hydro, biofuel and geothermal (energy from heat generated under the earth’s surface). JON WATKINS is a freelance writer

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Meet Pierpaolo, he’s one of three Masters of Wine here at Waitrose & Partners. He and his team spend their lives searching the planet to find the best wines for our customers. Think of them as your very own sommeliers. Because every single wine we sell has been hand-picked by them.


Pierpaolo, Partner & Head of Wine Buying


THE AGENDA The Agenda is compiled by Businesslife Fashion and Lifestyle Editor Thom O’Dwyer, with extra material by Danny Cobbs

is dreaming of a White Christmas

1. FASHION’S FINEST Founded in 2010 by London-based Australian design duo Tamara Ralph and Michael Russo, in 2014 Ralph & Russo became the first British brand in over a century to be elected by the all-powerful elite Chambre Syndicale de la Haute Couture to show their collection on the official schedule at Paris Haute Couture Week. Their list of A-list customers is prodigious. Widely known for their extravagant, downright dazzling Red Carpet confections, they’re equally accomplished when it comes to daywear and expertly tailored separates. A perfect example is the skilfully cut trouser suit and coat combo pictured here. The bold monochrome, windowpane check, double-breasted cashmere and wool suit features gold mirror buttons. It’s accompanied by an equally beautifully cut overcoat in a larger windowpane check. This is modern, cosmopolitan, ready-to-wear glamour with a definite couture edge. Jacket, £2,900; trousers, £1,500; overcoat, £6,900,


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2. A LOVING SPOONFUL If you can’t splash out and indulge yourself at Christmas, when can you? And what better way to greet the ‘season to be jolly’ than opening a gorgeous white-top tin of Royal Beluga Caviar from specialist food company Princesse d’Isenbourg et Cie? The London-based firm has been titillating the tastebuds of gourmands and connoisseurs throughout the world since 1988 with premium, top-quality delicacies. Beluga is the finest of caviars, with a palate-tickling flavour. Filled with proteins, minerals, vitamins and

essential oils, caviar is as healthy as it's sumptuously delicious. It's best served au naturel, and requires careful handling – do not, under any circumstances, let a metal spoon anywhere near it! It will taint the taste and impart a nasty metallic flavour. Instead, go for mother of pearl, like the spoon pictured here by Abalone Pearl. Joyeux Noël, as the bon viveurs say. Caviar from £118.38, 30g, to £3,780, 1 kilo; spoon, £15,


3. CORKS-A-POPPING Get the party started and bring on the bubbles! This year’s newest, most talked about champers, Moët & Chandon Ice Impérial Champagne, is the first and only champagne designed to be enjoyed over ice. Perfect for the festive season, this bubbly-tastic experience reaches its fullest expression when the fizz meets the ice. An intense fruitiness, seductive richness and a uniquely tangy, slightly sweet freshness is revealed, offering a moment of pure unadulterated pleasure. Shown here in a magnum bottle, it also comes in rosé. Should the ‘host with the most’ want to really impress big-time, why not try your hand at decapitating the champers bottle with a specially designed sabre? Watch your guests gasp as the mirror-polished stainless steel Georg Jensen Indulgence Champagne Sabre, pictured left, performs the age-old technique known as sabrage. How to do it? Easy-peasy. Just hold a champagne bottle at an angle then slide the blunt side of the blade along the body of the bottle toward the neck. As the blade hits the lip, the force of it breaks the glass, separating the collar and the cork from the neck of the bottle in one piece. Just be sure to check the first flute poured for shards. Champagne, £45, 75cl bottle; £95, magnum, Champagne sabre, £145,


4. CHRISTMAS IN THE BAG Although Carlo Zini is perhaps best known for his madly original bijoux jewellery, he also designs and produces a concise collection of equally inspired handbags. The Christmas Bag, pictured, is definitely the ‘It Bag’ for the festive season, and a perfect example of the designer’s creative power. Who else in the world would have the chutzpah to produce a luxury handbag that could only be used once a year? Crazy! The bag, complete with gilt hardware detailing, is lavishly decorated with yuletide evergreens, a holly wreath, candles and twinkling stars that feature Swarovski crystals, resin, gold metal, faux gemstones and pearl embellishments. There's an inside zip pocket and the bag can be carried cross-body too. The perfect accessory for Midnight Mass. £1,050,

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5. IMMERSE YOURSELF This futuristic white and gold Newton Bathtub is the ultimate statement in self-indulgent bathing. Think Cleopatra, along with her exotic bath-time rituals, and you get the picture. The bath is designed, produced and created to order by Maison Valentina, a new luxury brand specialising in high-end bathroom furniture and fixtures. Based in Portugal, the bathroom specialist aims to deliver the most sophisticated and exquisite bathroom furniture and state-of-the-art solutions. Everything is made using the finest materials and rare handwork techniques, assuring supreme quality with the highest design integrity. The Newton Bathtub features a timeless Victorian-style slipper shape, curved lip and individual feet, as well as a gold-plated interior. Everything considered, this is a truly sculptural and artistic piece meant for those with discerning contemporary tastes. €16,670,




6. TIME WILL TELL The Vivianna Bangle Watch, pictured, is iconic – seamlessly blurring the line between horology and modernist jewellery. Numberless, strapless and mirrored, its complete lack of distracting adornments is a singular departure from the expected. It’s designed by renowned Swedish jewellery designer Vivianna Torun (1927-2004), whose work is exhibited in a number of museums, including the world-renowned Museum of Modern Art (MOMA) in New York City. Fashioned from stainless steel, the mirrored dial is surrounded by a halo of sparkling diamonds. The watch’s minimalist design is both sensual and tactile, and the open-ended design gives the impression that the bangle floats above the wrist. Surely, then, this is the ultimate symbol of restrained elegance and femininity, liberating its wearer from the slavery of time. £1,545,


7. CINDERELLA MOMENT Are you ready to go to the ball? Thanks to legendary Italian design duo Dolce & Gabbana, the unreal has become fantastically real, and the glass slippers, pictured, are the perfect shoe for Christmas. A girl can live out her own fairytale dreams in these transparent fantasy pumps. Sparkling crystal embellishments lavishly adorn the design, adding to a dreamy and oh-so-feminine look. Team them up with an equally dazzling party dress or, for added drama, a severely man-tailored tuxedo, and you're sure to shine at any Christmas gathering or elegant holiday event. You might even find Prince Charming, should you happen to lose one of your slippers running for a taxi! £975,

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8.SARTORIAL WORK OF ART Nobody on earth cuts a suit with razor-sharp precision like skateboarding neo-dandy tailor Joshua Kane. When you buy a suit from his made-to-order service, what you’re getting is expert cutting, the best in contemporary design, and the finest custom tailoring. His fashion-forward aesthetic is undeniably theatrical, but eminently wearable. Which is why his client list is so disparate. On one side there’s Simon Pegg and Tom Holland. On the other, you’ll find British rapper Wiley and the wacky Russell Brand. The Oscar White Imperial Dinner Suit, pictured, is one of the sleek and elegant centre cornerstones of the designer’s Made to Order Service – a semibespoke option, where the garment is cut from the original in-house suit block but offers a broad series of optional shape, size and stylistic adjustments. Crafted within eight weeks of placing the order, the service requires two fittings. The slim-fitting jacket is supremely tailored in a uniquely designed and woven 750g white imperial 100 per cent wool cloth, and features peak lapels, side vents, and self-covered buttons with signature white logo lining. Accompanied by slimfitting, narrow-leg trousers, this makes the perfect high-season suit. £1,650,

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9. NO ORDINARY STOCKING FILLER Five years on from its rule-breaking P1 hypercar, McLaren has unveiled a second member of its range-topping Ultimate Series and named it after the Grand Prix team’s greatest champion, Ayrton Senna, writes Danny Cobbs. Basically, the new McLaren Senna is a road-legal track car and a genuine supercar slayer. To thwart the likes of Ferrari, Lamborghini and Porsche, McLaren has used advanced carbon fibre in the Senna’s construction, with plenty of aero bits to provide insane downforce and grip. A huge rear wing and front splitter, exotically shaped wheel arches and air-gulping scoops and inlets sprout from its teardrop silhouette. It also has an unprecedentedly low dry weight of 1,198kg. The suspension is a developed version of the P1’s all-independent, double wishbone layout, with specially tuned dampers that are hydraulically interconnected, plus another hydraulic system that functions as an anti-roll bar. The entire set-up is governed by RaceActive Chassis Control (RCC ll), a clever electronic gizmo that adapts automatically to road conditions but can also be configured manually from the centre console panel. A nine per cent power hike over the McLaren 720S cranks up the mid-mounted twin-turbocharged 4.0-litre V8 engine, sending 789bhp and 590lb of torque to the rear wheels and giving it an eye-popping power-toweight ratio of 660bhp per tonne. Straight-line performance figures are suitably impressive too: 0-62mph in 2.8 seconds and a top speed of 211mph. While not as exclusive as the 106 F1s that McLaren has ever built, the 500 Sennas planned for production will nonetheless help to solidify the English manufacturer’s reputation as a builder of the world’s best supercar. From £750,000,



9 10. TWINKLE TOES Specialising in slick statement shoes, formal and sporty, for the discerning, fashion-savvy Metro Man, Christian Louboutin launched his men's footwear collection in 2011. This is quality footwear delivering a seriously stylish punch, and with his signature flash of red sole. So why not upgrade your yuletide footwear kit with Louboutin’s to-die-for Louis Strass trainers? Meticulously handcrafted with couture care, the shoes feature hand-placed Swarovski crystals on the sides and toe. Doing the round of Crimbo parties and yuletide gatherings, these ice-white high-tops are sure to get both the guys and the girls talking. £2,295,

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11. CLOSE-KNIT CARDIE Only Gucci could transform a classic cable-knit cardigan into a maximalist work of gotta-have fashion art, complete with braided detailing and ribbed trims in the signature Gucci colours. Crafted in Italy from a luxuriously soft wool and cashmere blend, the design has a low V-neckline and a placket finished with golden trim and enamelled G buttons. The oversized silhouette makes it ideal for layering, as well as keeping out the White Christmas cold when the big freeze strikes. £1,350,




12. KEEP YOUR YULE COOL So it’s the season to be jolly, is it? Well, there’s nothing jolly about having to sweep up piles of pine needles that have fallen from a real tree. Nor is it much fun dragging out the skeletal remains of that once proudly decorated tree come Twelfth Night. So why not avoid the horrors of Christmas tree wreckage and go fake! But go fake with style, please. This deconstructed, postmodern, minimalist Wooden Scandi Tree from Cox & Cox, pictured, is definitely one of the hippest alternative tree options you’re likely to find anywhere. Crafted from blond wood with a stripped-down silhouette, this Scandinavian-inspired offbeat yuletide pinch-hitter features a slatted design crowned with a festive star detail on top. The ‘tree’ has a simple but sturdy cross-shaped base, cylindrical central pole and 28 slim cylindrical ‘branches’ – perfect for hanging your chic, minimalist decorations from. Whatever Santa says, less is always more. Let that be your seasonal template for a cool – and tidy – yule. £175,

13. LET IT SNOW This magnificent retro Christmas Snow Globe was made in 2013 as a special limited edition gift for select Chanel VIP customers. Kaiser Karl Lagerfeld really does know how to keep his high-profile big spenders happy! The globe features a white Christmas tree with the famous ‘CC’ signature logo on top, surrounded by a gaggle of Chanel goodie bags and boxes, also featuring the most recognised logo in the world. A très decorative piece, it would be an ideal stocking filler for any fashionista, especially a Chanel junkie. Although it's a few years old, the scratch-free globe is ‘as new’ and still has its protective film on the base. It also comes with its original Chanel black box. £407,

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14. JUST DIVINE It was in 2006, with his iconic Galaxy Dress, that Roland Mouret rose to fame. Since then his glamorous, figure-enhancing designs have given him international recognition. The designer's A-list clients include Scarlett Johansson and Nicole Kidman, as well as the Duchess of Cambridge and Duchess of Sussex and many others. It was also Mouret who acted as Victoria Beckham’s mentor and helped her to ascend the fashion ladder. Using only the finest, softest fabrics, Mouret’s technique of draping, and his distinctive demi-couture dress silhouette, have brought him critical acclaim. Pictured here, the meticulously draped Crawford Top exudes sophisticated sensuality. The elegant one-shoulder silhouette in an optic white colourway has been crafted in Portugal from the finest plush wool crêpe. Wear it with narrow, straight-leg, tailored trousers or one of the designer’s high-waisted, hip-hugging pencil skirts and a pair of seriously high stilettos, for chic, sophisticated, after-dark glamour. £450,

15. CHECK IT OUT This cooler-than-chic down-filled oversized jacket by Burberry is the ultimate winter warmer. It’s perfect for all outdoor activities, be it over the holiday season or when the March winds blow. The jacket comes from the last ever swansong collection by Christopher Bailey, who's been Burberry’s Chief Creative Director and CEO since 2009. During his tenure, he's reworked house classics alongside trend-led, streetwise, edgy looks, breathing new life into what had been a tired, ultra-traditional British brand. In doing so, he's helped save the label – best known for its classic trench coats – from extinction. Here, epitomising his tongue-in-chic wit, Bailey has overlapped one of the house’s vintage check prints with bold graffiti-style lettering, turning an ordinary workaday jacket into a cutting-edge showstopper. £1,290,



16. MAKING SCENTS Costing hundreds, sometimes thousands of pounds, the rarefied world of creating your own personalised fragrance is out of reach of most mere mortals. Not now though. Thanks to the Experimental Perfume Club, a new build-your-own fragrance set, Layers/01, is available from Liberty London and online. The founder, French perfumer Emmanuelle Moeglin, was determined to demystify the process of creating a bespoke scent, and Layers/01 is her DIY kit that’s remarkably affordable. It includes three 8ml bottles of the different distinct scent notes – top, middle and base – that describe the perfume process, as well as a blending bottle. Each layer is a unisex scent and, with the help of an excellent and informative booklet, you can blend the layers, creating a perfume to be found nowhere else. The company also hosts perfume workshops at its central London studios, where experts take you on a stepby-step guide to perfumery. £90,;


17. CHRISTMAS SPARKLES Since founding his bijoux jewellery business in Milan in 1976, Carlo Zini has reached dizzying heights of fame. Naomi Campbell, Raquel Welch, Cher and Madonna have all fallen under his spell. Even the Iron Lady, Margaret Thatcher, owned his pieces. The rather OTT Christmas necklace pictured here is handcrafted from non-allergenic rhodium and lavishly embellished with Class-A Swarovski crystals, faux pearls and gemstone coloured resin. And for real wow factor, why not pair it with these bejewelled festive themed earrings? Zini’s work represents the perfect mix between that long tradition of quality craftsmanship and dazzling creativity for which Italy has become renowned. Bijoux jewellery heaven. Necklace, £1,085,; earrings, £205,

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Directory To advertise in the directory in print or online contact Carl Methven on + 44 (0)1534 615886 or

Great learning boosts performance It’s a simple fact of business that people who know how to use their IT systems properly are more productive and happier at work. At ALX Training, it is our mission to ensure that every person we work with can use their essential applications properly, saving time, smoothing processes and creating a more productive workplace.

Appleby is one of the world’s largest providers of offshore legal advice and services. Uniquely positioned in the key offshore jurisdictions of Bermuda, BVI, the Cayman Islands, Guernsey, Isle of Man, Jersey, Mauritius and the Seychelles, as well as the international financial centres of Hong Kong and Shanghai. We are also the only firm to have offices in all three British Crown Dependencies. Our services include:

Ashburton Investments is an investment manager offering discretionary portfolio, multi-asset and specialist fund solutions to international private and corporate clients including family offices, trustees and wealth managers. While the rest of the industry may have had to come to terms with how the global financial crisis changed the world for their clients, we have simply carried on doing what we have always done – delivering risk adjusted returns through all market conditions.

Our trainers are renowned for their product knowledge, and their friendly and energetic attitudes to training help them get the best from every person they teach.

l Corporate l Dispute Resolution l Private Client & Trusts l Property

Learning starts at induction We are well-known for our range of Microsoft Office courses which includes Office 365, Excel, Outlook, PowerPoint, Word, Project, SharePoint and Visio but our clients know we can do much more.

Members of the Jersey and Guernsey offices regularly advise London City and international law firms on all legal aspects of offshore corporate, finance and investment fund transactions and arrangements in the Channel Islands.

Not only do we train on well-known accounting packages such a Xero and QuickBooks but we create courses on bespoke in-house systems. We design unique courses specifically for your organisation, so that your staff learn precisely the information they need to work efficiently and effectively.

For more information visit our website

Multi Asset is not the latest investment trend to us. It has been the cornerstone of our business since inception, supported by our experienced and longstanding equity specialists. For more than 35 years, we have invested in what makes sense. Our product set and approach to investments has evolved over time to suit ever changing market conditions but the underlying constant is that we understand our clients need to effectively manage risk and we put them at the centre of our thinking.

Wendy Benjamin Managing Partner, Jersey Group Partner, Guernsey

Globally, Ashburton Investments has over £9.1bn under management as at April 2018 with offices in the Channel Islands, United Kingdom and South Africa.

We know there’s no better place for your new colleagues to start learning than during their induction programme, so we develop bespoke induction courses that give your new starters all the information they need to hit the ground running. We can even deliver content online, so training can be ongoing and continuous.

Contact Laythamm Malorey E: T: +44 (0)1534 512010

Contact us to discover great learning opportunities: T: 01534 873785 E :

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Independent and Professional We offer a full range of management and fiduciary services to our domestic and international private clients and corporate structure: Family office - bespoke assurance l Wealth management - your strategy l Trustee - impartiality with vision l Corporate services - attention to detail l Good governance - a helpful eye l Strategic guidance - controlled ideas l

We aim to assist in the provision of personal service to meet your requirements. Ask us. Being vigilant and proactive in the face of a fast changing legal, economic and fiscal landscape. We can provide the focus to your solution. Try us. Our team has many years of experience dealing with a wide range of clients in different countries. We look to provide good corporate governance to achieve your aim. Contact us: Wendy Warder – Senior Trust Manager Lisette Le Creurer – Senior Trust Manager Justin Clapham – Client Director Áine O’Reilly – Client Director Tim Cartwright – Consultant Tel: 00 44 1534 870670 Regulated by the Jersey Financial Services Commission

Be Secure is a consultancy business providing professional services in the following areas GDPR data protection ISO 27001 Information Security l Cyber Security l EU Representative services l l

(via Irish office)

Be Secure, in association with partners who are experienced professionals in data protection, technology, cyber security and legal services are working to deliver high standard assurance and advisory services to Channel Islands organisations. We work as a business partner to your organisation in support of the board of directors, trustees, partners, senior management and staff in managing the governance obligations of data protection in this new GDPR data protection world! Be Secure is lead by a highly experienced finance professional, who has worked in senior roles in private equity owned businesses, in both commercial and financial services business sectors. As a member of the International Association of Privacy Professionals (“iapp”) and an accredited Certified Information Privacy Professional Europe (CIPP/E), Certified Information Privacy Manager (CIPM), GDPR Practitioner and ISO 27001 Lead Implementer, Be Secure’s founder and director can help you, and your colleagues, manage these areas in a professional and practical way for your organisation and clients. For further information please contact: Brian Siney, Founder and Director, CIPP/E, CIPM, ISO 27k Lead Implementer, FCA +44 7797 738743 or

Carey Olsen is a leading offshore law firm. We advise on Bermuda, British Virgin Islands, Cayman Islands, Guernsey and Jersey law across a global network of nine international offices. We are a full service law firm working across banking and finance, corporate and M&A, investment funds and private equity, trusts and private wealth, dispute resolution, insolvency and property law. Our clients include global financial institutions, investment funds, private equity houses, multinational corporations, public organisations, sovereign wealth funds, high net worth individuals, family offices, directors, trustees and private clients. We work alongside all of the major onshore law firms, accountancy firms and insolvency practitioners on corporate transactions and matters involving our jurisdictions. Our advice is delivered by an approachable and experienced team of globally-minded lawyers who work in partnership with our clients to help them achieve their objectives. We have the expertise and resources to handle the most complex international transactions combined with a personal approach to business. Contact: T +44 (0)1481 727272 T +44 (0)1534 888900

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Deloitte LLP provides audit, tax, consulting and financial advisory services, bringing worldclass capabilities and high-quality services to clients. The company has the broadest and deepest range of skills of any business advisory organisation - it’s what we do that makes the difference. Deloitte employs 160 professionals in Jersey and Guernsey and is part of Deloitte North West Europe (NWE). The impact we make unites over 15,000 of us across the United Kingdom and inspires us to lead the professional services industry. We work to provide trust and confidence in capital markets, support inclusive growth and competitiveness, and build skills and develop future leaders. As part of Deloitte NWE, we advise and deliver for the public sector as well as global and local businesses across every industry. The NWE firm brings together nine countries and over 30,000 talented people, giving us a breadth and depth of expertise to solve organisations’ most complex challenges and make an impact that matters for our clients, our people and society. For further information please do not hesitate to contact: John Clacy Partner, Guernsey D: +44 1481 703 210 Helen Gale Partner, Jersey D: +44 1534 82 4358

Estera is a leading global provider of fiduciary and administration services. Established for over 25 years, Estera provides corporate, trust, fund and accounting services to clients across the world. It has 500 highly qualified professionals across 12 jurisdictions: Bermuda, BVI, Cayman, Guernsey, Hong Kong, Isle of Man, Jersey, Luxembourg, Malta, Mauritius, Seychelles and United Kingdom. Estera collaborates with clients and their advisers to deliver smart, considered and most of all practical solutions, whether in a single location or across multiple jurisdictions. Our commercial focus, attention to detail and responsiveness coupled with a resolute commitment to the delivery of service excellence, is what sets us apart. Contact: Richard Prosser Group Director +44 1534 844 844 Estera Trust (Jersey) Limited is regulated by the Jersey Financial Services Commission.

About EY EY is a global leader in assurance, tax, transactions and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. Our strong network has enabled us to build close working relationships with our colleagues in EMEIA and across the world. This allows us to respond quickly to our CI clients’ needs, drawing upon our industry experience across all our services lines. To discuss how we can support your business, please contact one of our partners below: Andrew Dann, Managing Partner, Assurance E: T: 01534 288 655 Richard Le Tissier, Partner, Assurance E: T: 01481 717 468 Chris Matthews, Partner, Assurance E: T: 01534 288 610 David Moore, Partner, Assurance and Advisory E: T: 01534 288 697 Wendy Martin, Partner, Head of Tax CI E: T: 01534 288 298 David White, Head of Tax, Guernsey E: T: 01481 717 445

102 november/december 2018 To advertise in the directory in print or online contact Carl Methven on + 44 (0)1534 615886 or

Fiduchi is an independent multi-family office, trust, corporate and yacht services provider. We are owner managed free from the pressures of Private Equity, Corporate and Institutional ownership. We focus on the following three service areas: Private Wealth: We provide bespoke solutions to family offices and a broad range of HNWIs, entrepreneurs, business leaders and large families from all over the world. Corporate Services: including Real Estate, Capital Markets and Employee Services.

Highvern Trustees is a leading provider of wealth structuring, governance and advisory services to an international client base of high-net-worth individuals, their families and businesses. It offers senior industry expertise and client focus, developing long-term, sustainable client relationships by working closely with and getting to know the individual ambitions of every client with whom it works. Highvern Fund Administrators provides a fully tailored suite of bespoke fund services to investment managers and family offices across private capital markets including renewables, private equity, real estate and debt.

We’re a global leader in delivering fund, corporate, capital market and private wealth services to multinationals, fund managers, financial institutions and business entrepreneurs. With over 2,500 employees working from 41 offices in 29 countries across Europe, the Americas, AsiaPacific and the Middle East, we’re focused on delivering high-quality tailored services to our clients with a view to building longterm relationships. In the Channel Islands we offer a comprehensive range of services to our clients and business partners: orporate Services C Fund Services l Real Estate Services l Capital Markets l Private Wealth l Performance & Reward Management Services l

Yacht Services: (formally Jersey Yacht Management Limited) are leading specialists in the offshore yacht, megayacht and superyacht services industry. We have a thorough knowledge of all aspects of yacht ownership structures, yacht registration, tax, administration and crew employment and payroll. For further details contact: David Hopkins - Managing Director +44 (0) 1534 755 111 Robert Ayliffe - Executive Director +44 (0) 1534 755 124 Darren Hocquard - Executive Director +44 (0) 1534 755 101

Both businesses are built on cutting edge technology, truly independent ownership and a team of experts with the shared vision of responding to client needs in a flexible, timely and constructive manner. To discuss how Highvern can help you or your business achieve your goals please contact : Family Office Naomi Rive, Group Director + 44 (0)1534 480601 Private Client Miles Le Cornu, Group Director + 44 (0)1534 480603

Funds Aidan O’Flanagan, Head of Funds + 44 (0)1534 480690

Fiduchi Limited is regulated by the Jersey Financial Services Commission.

Email: Highvern Trustees Limited and Highvern Fund Administrators Limited are regulated by the Jersey Financial Services Commission


We pride ourselves on providing professional, personal and cross-border services to our clients across the globe. For further information, please contact Simon Mackenzie Managing Director, Jersey +44 (0) 1534 504000 Andrew O’Shea Managing Director, Guernsey +44 (0) 1481 211000 Intertrust Jersey is regulated by the Jersey Financial Services Commission and Intertrust Guernsey is regulated by the Guernsey Financial Services Commission.

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Julius Baer’s origins date back to 1890. From that time the renowned Swiss private banking group has been dedicated to serving and advising sophisticated private clients and family offices from around the world – going on 125 years now. Julius Baer employs more than 100 staff in Guernsey and offers a range of financial services, including portfolio management and investment advisory. Credit services include the provision of Lombard lending and UK buy to let mortgages. There is also a dedicated team that supports the needs of External Asset Managers and the Branch works closely with the wider Julius Baer Group through the provision of administration and support services that are delivered from its booking centre.

KPMG in the Channel Islands is a leading provider of professional services, including audit, tax and advisory. With offices in Jersey and Guernsey, we employ over 260 members of staff across the two islands. We work closely with clients, helping them to identify and grasp opportunities, and mitigate risk. KPMG’s global network enables us to draw on international resources to meet clients’ needs. KPMG member firms are located across 154 countries and employ more than 200,000 people around the world. With passion and purpose, we work shoulderto-shoulder with clients, integrating innovative approaches and deep expertise to deliver real results.

Steve Burt Branch Manager

Jersey Jason Laity Chairman

Jean-Luc Le Tocq Head of Private Banking

Andrew Quinn Head of Audit

Craig Allen Head of Investment Management

John Riva C.I. Head of Tax

Shaun Kelling Head of External Asset Management

Robert Kirkby Advisory Partner

Guernsey Neale Jehan Managing Director

Bank Julius Baer & Co Ltd, Guernsey Branch is licensed in Guernsey to provide banking and investment services and is regulated by the Guernsey Financial Services Commission.

Tony Mancini Tax Partner Ashley Paxton C.I. Head of Advisory

Specialty: Bespoke IT Development & Business Consultancy Puritas is an award-winning provider of intuitive software and business solutions for the financial services industry. Specifically designed to meet the increasingly complex accounting, compliance, and reporting needs of our clients, all software features robust audit and control capabilities which can be easily updated to reflect changes in the regulatory environment. Our products include: l PureFunds - a unitized product platform specifically designed to support many different types of asset class and fund structures and help fund administrators and portfolio managers better manage investor activity l PureClient - an advanced customer due diligence/client management system which will maintain and update client records for any entity or relationship and provides the necessary transparency and look-through reporting that is needed to manage sophisticated structures l PureManager - a bespoke software package for fund and investment managers which provides for effective control, analysis, reconciliation and reporting of daily trading activity. As well as software development, our services include: l Systems integration and implementation l Programme and project management l Project and business consultancy To find out more how Puritas can help your business. Contact: Mike Feighan - Director Phone: +44 (0) 1534 874100 Email:

104 november/december 2018 To advertise in the directory in print or online contact Carl Methven on + 44 (0)1534 615886 or

Building trust in society and solving important problems We focus on three things at PwC in the Channel Islands: assurance, tax and advisory services. But how we use our knowledge and experience depends on what you want to achieve. So whichever one of our 390 staff in the Channel Islands you work with (or 225,000 people across the PwC global network of member firms), they’ll start by asking the following questions: Are you looking to build trust? Give your shareholders more value? Or do you want to do something completely different with your strategy? When we work with you we really listen, to understand you better. We’ll get to know you, your business and your goals. Then we’ll share what we’ve learned to help you get there. We want to deliver the value that you, our clients, our people and our communities are looking for. Talk to us about your issues and aspirations. For further information, please contact: John Roche, Partner, Guernsey Phone: +44 1481 752040 Email: Karl Hairon, Partner, Jersey Phone: +44 1534 838276 Email: Follow us: @PwC_CI URL:

Vantage is an innovative group of companies providing a wide, yet associated range of specialist services to our professional, corporate and private clients.

Viberts is dedicated to providing outstanding legal advice and customer service, both in Jersey and internationally.

Since our formation in 2006 we have grown to offer an extensive range of business solutions to meet the expanding and everchanging needs of our clients – to solve their problems and to improve efficiencies.

Our clients range from private individuals to multinational corporations, local businesses and public authorities. We are large enough to offer a full service but small enough that each client has direct contact with one of our partners. We always take a pragmatic approach so that we can deal with matters as efficiently as possible, but we are also compassionate and understanding when it comes to sensitive issues.

We can insure a firm’s buildings, contents and liabilities, arrange the company pension scheme, advise on life assurance, and provide medical insurance for all staff members. We can provide office space, source new staff and advise on employment matters. We can also consult on salary levels and employee benefits.

We partner with other specialists across the globe where required to bring you the best possible advice and representation.

We provide both regulated and nonregulated services, specifically:

Our range of bespoke legal services includes:

l Insurance Broking l Captive Insurance Management l Pensions and Retirement Planning l Investments and Life Assurance l Remuneration Surveys, Recruitment and HR Advisory l Serviced Offices and Property Management

l Commercial l Employment l Family l Litigation l Personal l Property

For further details please contact: Richard Packman, Chief Executive, Vantage Group +44(0) 1534 706503

For expert legal advice, please contact us today. E: T: +44 (0) 1534 888 666 W: Vantage Limited, Vantage Insurance Brokers Limited and Vantage Pension Trustees Limited are regulated by the Jersey Financial Services Commission.

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20 questions with JENSEN NIXON

➤ Tea or coffee? It’s the age-old question. For me, each day starts with a serious caffeine boost, preferably Taylors high-voltage ground coffee. Favourite song ever? That’s such a difficult question, but it would have to be INXS, Mystify. Most amazing place you’ve visited? I’ve visited a few gorgeous places, but for its sheer beauty it would have to be the Maldives, followed closely by Phang Nga Bay in Thailand. Scariest thing that’s happened to you? The first time I held my newborn daughter, I froze. I had no idea what I should do. Your best quality? Passion in everything I do. If I say I’m going to make something happen, I will make it happen. ‘Can’t’ isn’t a word I would ever use.


The worst thing about you? That’s another difficult question. I strive for perfection in everything I do, which results in me being very critical. Last meal on death row? A mixed Sunday roast followed by Eton Mess, then a smorgasbord of cheese washed down by a few bottles of red. Might as well prepare for the big journey ahead. Cats or dogs? Dogs. I have two – Bailey, a hunting Labrador, and Roxy, a Cockapoo. I’d never be without them. Can you play a musical instrument? I played the guitar for a while when I was younger. The only thing I can play on it now is the classic James Bond theme tune from Dr No, which I’m sure 99.9 per cent of people could play. STRUNG OUT


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First job you had? I actually set up my own leaflet distribution business in Dublin when I was 12 years old – I ended up with three people working for me. Worst job you’ve done? When I initially came to Jersey, I worked as a kitchen porter. It wasn’t

so much the job that was the problem, it was getting paid £80 a week when I was 18. My partying was limited! What’s at the top of your ‘bucket list’? It would have to be a rucksack on my back and a trip around the world. I’d begin in Dubai, before working my way across to Asia, where I’d start in Vietnam and then travel around South East Asia. I’d travel on to Australia and New Zealand, finishing in the Americas. Last time you cried? That would have been about three years ago when I found out that my mum had been taken into intensive care in Spain. Sweet or savoury? No contest, savoury any day of the week. I love a cheese board accompanied by a glass of Châteauneuf-du-Pape. Have you ever met anyone famous? Getting off a flight from South Africa, I met Chelsy Davy, Prince Harry’s then-girlfriend. The next day, I could be seen all over the newspapers. Best piece of advice you’ve ever been given? Never above you, never below you, always beside you. If your house was on fire and you could save one item, what would it be (family excepted)? It would have to be the dogs, no hesitation. Buzzword you hate the most? Blue-sky thinking. What do you have for breakfast? On most days I have a French breakfast. Something about you that people might be surprised by? I achieved an Honours degree in professional computer studies in 12 months while working full time… Goodness knows how! Jensen Nixon is CEO of Jersey-based tech R&D company WARM.




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