Welcome
in this together HAVING ENDURED FOUR straight years of Brexit uncertainty, few, if any, could have predicted what was to follow in the form of a global pandemic that has turned many of the world’s financial centres into ghost towns and sent markets into a spiral. As a result of the coronavirus pandemic, the UK economy suffered its biggest slump on record between April and June. The UK economy shrank 20.4% compared with the first three months of the year. Household spending plunged as shops were ordered to close, while factory and construction output fell – all of which pushed the UK into its first technical recession since 2009. In the markets, the FTSE All-Share Index fell by 35% between 2 January and 23 March, before beginning its bounce back. And all this has been happening while the uncertainty and potential impact of Brexit continues to lurk in the background. Yet despite this upheaval and volatility, London – and the UK in general – stands fit and ready to respond to the challenge. And the Channel Islands is perfectly placed to support the UK through that recovery. “Our relationship with the City and the UK is one of partnership,” Jersey Finance CEO Joe Moynihan tells us, as we explore the UK’s recovery in our feature on page 28. “The UK remains a secure and stable jurisdiction and we will continue to act as a major conduit to ensure capital is invested there.” Guernsey Finance is also supportive. “We attract overseas families, institutional funds and private equity – all looking for solid and diverse investment opportunities. The UK offers that,” Guernsey Finance Chief Executive Rupert Pleasant says.
BUILDING TOGETHER In this special City Edition of Businesslife, we also explore other areas in which the Channel Islands and the City of London are working closely together to deliver mutual benefits and opportunities to thrive. In the real estate sector, for example, our feature on page 16 explores how investment in UK property is big business both in Jersey and Guernsey. The Monterey Insight Jersey Fund Report 2018 estimated that, even back then, there were already more than 100 Jersey-based funds focusing on UK real estate, with a combined
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net asset value of more than $42bn. And, according to Guernsey Finance, in excess of £20bn of property is held in Guernseydomiciled real estate funds today. Furthermore, the Channel Islands are becoming an increasingly attractive pathway for international investors looking to enter the UK property market. As one expert tells us: “Jersey and Guernsey each offer a stable jurisdiction; they each have a recognised rule of law, as well as elected parliaments and judicial systems that bring freedom and independence. There’s a very high standard of regulation, which is important for investors having confidence in any jurisdiction, and the strong level of compliance here means that investors can be sure the money that flows through the Channel Islands is legitimate.”
SUSTAINABLE PARTNERSHIPS Another area of opportunity for both the City and the Channel Islands is the continued rise in popularity of green and sustainable investing. While competition for business will always exist between jurisdictions, the consensus view is that, by working together to face cross-border challenges, the City and the islands could further increase the flow of funds between them – enhancing “the connectivity between the two”, as our feature starting on page 34 explains. At the heart of this is work taking place in the Channel Islands on verification to counter ‘greenwash’ and shore up the sector for the long haul – a move that is putting the islands at the forefront of the sustainable investing movement and enhancing their appeal to jurisdictions such as the City, experts tell us. On the subject of development, in this issue we also explore how a collaborative approach to fintech – backed by forward-looking regulators – is helping that sector develop and thrive in both jurisdictions. The results of this collaboration are impressive. And they also serve as a symbol of what can be achieved by jurisdictions being willing to work together to solve issues and meet demand. And that’s likely to be essential as we emerge from the uncertainties of Brexit and coronavirus, and enter a new world. n
The Islands are becoming an increasingly attractive pathway for international investors looking to enter the UK property market
Jon Watkins is Editor-in-Chief of Businesslife
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