BL Magazine - City Edition 2021

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navigating uncertainty Why the Channel Islands offer stability in turbulent times


• sustainable investing • reits • SPACs frenzy • female entrepreneurs • PE activity



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Harbour in the storm THE IMPACT OF Covid-19 and Brexit on the City of London’s financial sector has been well documented – spanning seemingly endless column inches and dominating news channels for months on end. From changing client investment strategies to geographical challenges, huge market volatility, and new ways of working, this Covid/Brexit double-whammy of disruption has delivered one of the most turbulent times in the City’s history. Amid the upheaval, however, the Channel Islands have continued to offer City organisations a strong and stable market in which to place their clients’ investments and to find opportunities for growth. In fact, as our feature starting on page 16 explains, the islands’ longstanding stability, expertise, established track record and consistency of service have seen a growth in City-Channel Islands activities across a number of areas in the past 18 months. Take UK real estate investment trusts (REITs), for example, which are one of the Channel Islands finance sector’s great success stories at present. Earlier this year, The International Stock Exchange (TISE), the islands’ stock exchange, announced that it had become the listing venue for more than 40% of all UK REITs – 37 out of a total of 90 – with eight joining the exchange by the end of May. TISE has established itself as a clear platform of choice for new REITs coming to the market, with a significant proportion incorporating in Guernsey and Jersey. The reason, according to our article, is the islands’ ever-growing body of expertise among lawyers, administrators and other professional advisers. “Jersey and Guernsey are attractive for institutional investors. We have flexible companies, law and regulatory regimes, and these are well respected jurisdictions that are familiar to the London market,” one leading industry figure tells us.

WIDER APPEAL It’s not just in niche financial vehicles that the Channel Islands offer London financiers and wealth managers the prospect of stability and opportunity. They are also playing an increasingly crucial role in the thriving private equity and venture capital markets (see page 40). According to the Jersey Financial Services Commission, PE and VC funds under administration grew 21% year-on-year in 2020 to £164.6bn.

In addition, almost 100 new Jersey Private Funds were registered, bringing the total to more than 400, most of which are Jersey-domiciled structures. “We are seeing a lot of enquiries – from first-time fund managers, including family office set-ups, to spin-outs from established firms looking to set up in Jersey,” another market figure tells us. “Part of that demand is Brexit-driven – managers are looking to market to the EU through the National Private Placement Regimes.” However, it’s also down to the islands’ structure and approach. “[It’s a] very costconscious, pragmatic jurisdiction when it comes to setting up fund structures. Our legal set-up, tax advice and regulations make it a favourable regime – we’re picking up decent deal flow,” our article says.

TAXING ISSUES Of course, like all jurisdictions the Channel Islands are not without challenges. Plans among the G7 nations to introduce a global tax rate – designed to target those multinationals that are currently based in lowtax jurisdictions to avoid paying their dues – on the face of it pose a threat to the islands’ competitive advantage. But, as our feature on page 26 sets out, Channel Islands leaders argue that the jurisdiction’s minimal reliance on the big tech firms at which the regulations are squarely aimed, together with the possibility of exemptions – or ‘carve-outs’ – for the funds industry, mean they look set to retain much of their appeal, regardless of progress by the G7. Throughout this issue, we explore these – as well as other – opportunities for the Channel Islands and the City of London to work together to deliver increasingly diverse, flexible and fruitful investment and wealth management services as we move out of the shadows of Brexit and the height of the pandemic. Those opportunities could certainly prove fruitful – not least for the City. As Channel Islands-based consultant Geoff Cook explains in our article on page 6: “If the vision of Global Britain is to succeed, Britain must be proactive in building a platform to launch its new global ambition – a platform requiring trade horizons to be reset, partnerships to be forged, and relationships in new and existing markets to be deepened. These are all areas where the Channel Islands have experience.” n

The Channel Islands and the City can work together to deliver increasingly diverse, flexible and fruitful opportunities

Jon Watkins is Editor-in-Chief of Businesslife

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36 8 interview

22 green investing

36 gender equality

The new CEO of Credit Suisse in Guernsey, Glen Tonks, on his path to the top and his future plans

We assess progress with the Guernsey and London Green Finance Initiative, which promised to bring the jurisdictions together on sustainable investing

Female entrepreneurs are on the up. We look at the challenges they face and the support available

26 corporation tax


As calls grow for a global tax rate on the tech giants, what are the implications for the Channel Islands?



16 IFCs As City firms grapple with instability as a result of Covid-19 and Brexit, the Channel Islands provide a safe haven for consistency and service

30 reits We ask why so many UK real estate investment trusts have been listing on The International Stock Exchange (TISE) and what sets the islands apart from listing in the City

Geoff Cook gives his perspectives on the Channel Islands’ crucial role in creating a Global Britain

40 Private equity and venture capital PE and VC activity has surged in the pandemic – we ask what’s driving the activity and whether it’s set fair for the future

46 spacs Special purpose acquisition companies are all the rage, so why the sudden interest?

50 passion investment Far from crushing classic car enthusiasts, the trend towards ESG could fuel further invesment

55 The knowledge Inflation in numbers, how to get people back to the office, Gordon Brown in focus and much more

contributors The BL Global Discussion Forum


Follow us @blglobalnews Office: 7 Castle Street, St Helier, Jersey, JE2 3BT © 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.

David takes a look at a sector that’s been seeing rapid growth – private equity and venture capital – and asks whether a rise in activity during Covid-19 will continue postpandemic.


James examines the progress made by the Guernsey and London Green Finance Initiative, which was launched with great fanfare and a promise to drive sustainable investment opportunities.


Sophie asks why it’s so difficult for female entrepreneurs to access the same funding opportunities as their male counterparts when the statistics show their businesses often perform better.


Alex explores the rising appetite among UK real estate investment trusts to list on TISE – and finds that it’s the Channel Islands’ stability and flexibility that is driving the appeal.

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The Channel Islands’ role in building Global Britain

GEOFF COOK Consultant, Mourant

For Britain to further its global ambitions, trade ties must be reset and relationships in new and existing markets deepened – and the Channel Islands are a key part of this


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here have been polarised views around how Britain might emerge from Brexit. Some have suggested that separating from the EU bloc risks leaving Britain isolated and without companion. On the other hand, it has been argued that Brexit will create an opportunity for Britain to plough its own furrow as a global player and a key independent G7 member. The reality is probably somewhere in between. Nevertheless, the idea of a Global Britain is certainly not a pipe dream. In a post-Brexit landscape, Britain can expect to retain certain advantages that have, until now, helped it become a top 10 global economy. It will remain an attractive investment destination, for instance, and it will still have soft and political power – being a leader in academic prowess, bioscience, digital innovation, academic excellence and financial services. In a vision set out in Chatham House research paper Global Britain, global broker, Robin Niblett sees Britain as a global influencer, shifting from being a part of the EU supporting cast to a worldwide interlocutor, stimulating trade and investment, offering stability and international capabilities. It’s a vision that acknowledges Britain’s inherent strengths, and which points to shifts in trade patterns and wealth creation from West to East. It’s also a vision that should carry meaning for international finance centres, particularly the Channel Islands. IFCs such as these, which have strong ties with Britain and Europe, should be alive to what a ‘Global Britain’ could mean for them – there’s potential for them to support the UK and play a pivotal supporting role.

As well as there being strong historical ties that bind Jersey and Guernsey to Britain, they also have a shared interest in seeing Britain succeed. Their experience in facilitating global trade and their unique expertise have the potential to be the foundation for a reciprocal, beneficial and even closer partnership in the future. BUILDING A GLOBAL PLATFORM It is acknowledged that, if the vision of Global Britain is to succeed, Britain must be proactive in building a platform to launch its new global ambition – a platform requiring trade horizons to be reset, partnerships to be forged, and relationships in new and existing markets to be deepened. These are all areas where the Channel Islands have experience. There is positivity around the potential of international trade in 2021. However, the landscape is becoming more complex. The indications are that in 2021, we will see a sustained focus on Asian recovery, a region that has seen a resurgence in the wake of the pandemic. At the same time, recent moves by certain Asian governments to relax foreign ownership rules and promote inward investment will inevitably result in more significant capital flows, with foreign capital set to be critical to Asian economies as they look to rebuild. Consequently, there will be real opportunities to support that investment across the Asian markets. It stands to reason that exploring ties with the APAC region will be pivotal for Britain – which is why the treaty signed with Japan and deals with Singapore and Vietnam are so significant. They fit into a broader strategy of expanding trade


and foreign policy ties across the Indo-Pacific region. Meanwhile, the US, an essential trading partner for Britain, also looks set to bounce back in 2021. With the US continuing to score well for ease of doing business, it will remain a key location for start-ups. President Joe Biden is also reviving relationships between the US and bodies such as the World Trade Organization and the EU, strengthening the US appeal as an investment destination and growth market. Also providing scope for British optimism is the fact that private capital looks set to play an essential role in global economic recovery – especially given Britain’s strength as one of the largest international investment hubs for families and private investors, as well as institutional capital. Figures suggest that private capital is ready to be put to work, as economies deal with massive national and personal debts and as a pressing need to rebuild infrastructure, businesses and communities presents itself. Britain can play a crucial role in providing this muchneeded investment. FAMILIAR GROUND The global role being put forward for Britain in this new landscape is familiar ground for Jersey and Guernsey – being

“As well as historical ties that bind Jersey and Guernsey to Britain, they also have a shared interest in seeing Britain succeed”

a neutral, independent, global broker facilitating international trade and flows of capital is really the bread and butter for the islands. They are experts at it. The route to a Global Britain won’t be easy. The world today is very different from the world in 2016, when the referendum took place. Covid-19 has dealt a significant blow to the world economy; China’s relationship with global markets is more complex; the US dynamic is evolving; and geopolitical competition is increasingly heated. This backdrop is exactly why the route to achieving Global Britain is so pertinent to the Channel Islands as an IFC. They have a real opportunity to

support the Global Britain vision – as investment facilitators, they are almost uniquely experienced in navigating global complexity and they are ideally positioned to support and complement Britain’s aspirations. The islands are agile, they have digital capability, and they are hotbeds of innovation. They have already embarked on global strategies, with experience in managing and facilitating cross-border flows. They are stable – a rare commodity in today’s geopolitical environment – and have tried and tested rule-of-law, strong anti-corruption measures, as well as stable democracies. It’s a powerful proposition reputationally too – with Britain and the Channel Islands working together and playing a crucial role in global economic recovery. Through the provision of efficient administration, transparent capital pooling, and the upholding of the highest standards of regulation and good business conduct, the Channel Islands can play a valuable role in helping Britain establish its new global platform and achieve its international goals. The key now will be asserting that role with confidence and clarity. If they succeed in that, they will be able to help Britain – and the world – build back better. n

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a variety of regional leadership roles around the world has made Glen Tonks something of a specialist Country Manager. Having recently taken the top job at Credit Suisse in Guernsey, he explains why the role was so appealing, why the Channel Islands’ relationship with London is more important than ever, and his plans to transform the organisation Words: Jon Watkins Pictures: Chris George

How did that experience lead you to your current role with Credit Suisse in the Channel Islands? At the end of 2019, with HSBC and based in Jersey, we decided as a family to take a career break. I’d spent the better part of 25 years in financial services, we’d moved around a lot and never really taken time out. So 2020 was going to be a year-long career break travelling the world. Of course, after a couple of months, the pandemic hit and changed our plans considerably. We were in Australia in March and, with the situation worsening by the day, we decided to go back to New Zealand, where we ended up being locked down. As a result of that, and with us not going anywhere fast, I decided to put some plans in place on where I wanted to go next with my career.

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To do that, I put together a list of where we would like to live in the world – and the Channel Islands was up on the list because we’d had a fantastic time in Jersey. I also wanted my next role to be with a firm with strong values and a strong culture – and Credit Suisse was on that list. And then I looked at the type of role I wanted – a leadership role where I could really help steer the direction of the organisation. It just so happened that the Chief Operating Officer role came up at Credit Suisse, Guernsey, which ticked all the boxes. So I joined Credit Suisse in October last year. It’s been a fantastic eight months and, having spent the best part of six months as the COO, I was privileged to take on my current role as CEO for Credit Suisse in Guernsey a few months ago. Is that expertise across different areas of banking more important now, given the complexity and interconnectedness of financial services today? There are two parts to that question. When I was setting out on a career myself, I was keen on variety and diversity. I always had a career goal of being a country CEO and I thought the best way to achieve that was by having broad experience and knowledge, and a diverse range of skills. So it’s important from the perspective of achieving the role you want. The second part is around the challenges and the opportunities we face today, particularly with emerging and disruptive technology reshaping our industry and changing our clients’ expectations. You need people in certain roles with quite broad experience, but you also need real specialists. From a risk perspective, cyber risk is one of the key challenges we face, particularly as we do more online and as we introduce more automation and technology. For that, you need specialists. So I think the answer is that you need both.

You mentioned your long-held ambition to be a country manager. What drove that ambition and what is it about your skillset that has helped you be such a specialist? What drove me was the desire to have a role where I could command my own destiny, where I could reshape a strategy to enable the business to thrive – and I’ve always felt the country CEO is the perfect role to do that. I’ve always been interested in strategy. I’ve always tried to step back and look at that bigger picture – to ask what clients want from us, to examine what our competitors are doing, to understand the things reshaping our industry. The country CEO role is perfect for realising that. The other reason I like the role is that I like being close to the clients. I want to be where the rubber hits the road, mixing with the clients. I spent the first 10 years of my career very much in relationship management, sales and distribution – and that fuelled my interest in dealing directly with the clients. While on your career break, you also studied for a master’s degree at the Tech Futures Lab, with the focus on leveraging technology. Was that a deliberate choice or was the timing somewhat fortunate in terms of technology becoming such an enabler during the pandemic? It was a bit of both. When we took the career break, there were two things we wanted to do as a family. One was to travel the world with our two young girls – to have some really amazing experiences. That was really important for us as a family. The second thing I wanted to do was some further education, because I’d joined the world of work straight out of school and, while you do a lot of training and development with the types of businesses I’ve worked with, I’d long had an itch to do something in a university setting.

Tell us about your background and how you moved into financial services. I grew up in a small town just north of Wellington, New Zealand, and eventually moved north to the city of Auckland. I joined a local New Zealand bank straight out of school – without actually even moving into sixth-form. That was sparked by my stepfather. He was a manager for a local bank, I’d always been quite good at maths – numbers fascinated me – so I decided to join a bank. From there, I had five years with Westpac in New Zealand. I then joined HSBC and spent 19 years in roles around the world – from Jersey to Hong Kong and then leading the New Zealand business, as well as being a head of risk in the private bank in Asia. One of the things I’ve done with my career is to build it quite broad. I’ve worked across retail banking, wealth management, private banking, commercial banking – first and second line of defence – working in risk but also in the business.



interview Glen Tonks

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Interview As I mentioned, strategy has always interested me, but so does technology, and that was the driver behind the master’s – to further fuel that knowledge but equally to make myself match fit for the future. Technology, particularly emerging and disruptive tech, is probably the biggest driver of change in our industry, so it seems a sensible choice.

How has the operation in Guernsey performed in recent years – and what is the plan for the next period? The strategic journey for the branch over the past four or five years, under my predecessor, has been one of reshaping – a reorganising phase. It’s a little bit like building a house – you set a really strong foundation and now we’re in the growth

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phase. So one of the key things I’ve done in the past eight months here in Guernsey is to implement a new three-year strategic plan, which has broad support from key stakeholders within the group to enter a growth phase. And I think that’s the key message: we are now in a growth phase for Credit Suisse in Guernsey. What does that strategy entail? The strategy is split into three parts. The first part is growth – accelerating client growth and investing in our people, or what I call developing the skills of the future. As technology is rapidly changing our industry, the pace of change today will be the slowest in our people’s careers. So we need to think about it that way – developing our people and our skills for the future, to enable that growth and an innovative mindset to really support change. This is also about developing and motivating our people so we are an employer of choice here in Guernsey. Priority number two is around improving our operational efficiency, particularly as a booking centre. That’s about introducing more automation, so we can be more scalable, more productive in what we do, and reduce risk in our operation. That’s also about empowering people to do more. That comes with a growth and innovative mindset and it will greatly help us accelerate the pace of change. When you’re in a reorganising phase – which we

Guernsey is an important booking centre for our UK business. It’s also an important booking centre for our Switzerland clients

have been for the past four or five years – you tend to rely on more centralised decision-making. That’s right for the time, but it doesn’t work when you’re in growth. As to efficiency, that’s all about trying to drive more continuous improvement – to make us more efficient, more effective and more flexible to meet our client needs. The third part of the strategy, and arguably the most exciting, is around transformation. This is a transformational programme aimed at really harmonising the wealth management platform globally. At the moment, all our markets have a different technology stack, a different platform, different products and services. This transformation is about harmonising all of those, which will really enable the group to accelerate growth and enable us to scale up. It will also allow us to manage our risk better because we will no longer be using different platforms, different systems and different risk reporting. The strategy is a multi-year programme and, in 25 years in financial services, it is the biggest thing I’ve seen in terms of

You’ve been in the hotseat at Credit Suisse in Guernsey for a couple of months now. Can you share an overview of the business in the Channel Islands? Our operation in Guernsey is a material branch for Credit Suisse AG, the parent. One of the important things I say to clients booking in Guernsey is that you are getting access to the parent balance sheet. So we’re not a subsidiary, we are a material branch. That’s the first important thing. We are one of the leading booking centres for the Credit Suisse Group and particularly for the UK, and my reporting line is into the CEO for the UK. That’s important because a big target market for the private bank that we have in the UK is the resident non-domiciled client. Those clients need to have assets offshore and that’s why Guernsey is an important booking centre for our UK business. It’s also an important booking centre for our Switzerland-based clients. And that’s crucial for a couple of reasons. One is that we are a branch and we’ve got the balance sheet strength. The second is that we have the expertise and capabilities to do that as a booking centre. That is our bread and butter. We do that day in, day out. And we have a strong discretionary investment management team with those capabilities in mind. Another key thing for Guernsey is the treasury capability that we have within the group – we have a large treasury function here that enables funding throughout the group. A large percentage of the private bank’s deposits are booked through Guernsey, because we’ve got that infrastructure and risk management capability here. Finally, the majority of Credit Suisse Group’s proprietary investments are also booked through Guernsey. We’re not just a wealth management branch. There’s some really interesting stuff we do here because we’ve got the infrastructure and the teams with the skills and capabilities required, be that treasury or proprietary investment.

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Interview transformation and investment. It’s about delivering the bank of the future and it’s changing everything that we do – front to back – through new tools, a new operating model, new products and new services. It’s a significant investment in technology and the business here in Guernsey. What will be the outcome for clients? I think the main thing will be better client experiences. The aim is that it will give us simpler processes – a bank that will be easier to deal with. It will mean more digital capability for our clients, too. But what it will mean actually – and this is probably the most important thing – is more time for our relationship managers to spend with clients. That’s the efficiency and productivity piece. The whole plan is very much centred around the client, and I come back to this point about everything we do being focused on the client – through technology, operational excellence, our people and driving more entrepreneurial thinking. What’s driving that renewed emphasis on the client experience? We understand that there is a change taking place in terms of what clients want and how they want to engage. When you look at all these influencing factors we have right now – a changing demographic, the rise of awareness of ESG, a desire for purpose as well as profit – the client experience needs to respond. A big advantage the traditional banks have – banks like Credit Suisse – is that we have a huge amount of data about our clients, which has been built up over decades. Transformation is about unlocking that data to be able to use it in a way that can give better experiences to our clients. And, notwithstanding the challenges from fintechs and digital neobanks, the area in which we have a competitive advantage is in our data. This isn’t your first role in the Channel Islands. What is the continued appeal of the islands in your view? From a Guernsey perspective, where I sit right now, I think there are a number of things to recognise. First and foremost, it’s an international finance centre of more than 50 years’ standing – and that means something. It’s self-governing, it’s self-funding – and it has some 800-odd years of independence. It has a strong credit rating from S&P. It has one of the highest regulatory standards globally. It’s endorsed by the OECD. And it has a worldwide reputation for financial services innovation. So all of those things together, plus the tax efficiency, make Guernsey a very strong, very capable jurisdiction for an individual, family or trust to put their assets in. As is always the case, there are a couple of issues

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FACT FILE Name: Glen Tonks Role: CEO, Credit Suisse, Guernsey Born: Just outside Wellington, New Zealand Family: Married; five children Home: Guernsey Hobbies: “As a former international-level rower back in New Zealand, I now row on a machine rather than the water; but would like to get out on the water here at some point!”

that are currently a watching brief – such as the global tax discussions. But I come back to the Channel Islands overall being a very appealing jurisdiction in terms of the skills and capabilities that are here. If I look at private equity or venture capital funds, for example, we have very strong capabilities here for those sectors, and those funds. And those important points around governance, the history of the islands as a financial centre, together with very strong regulatory standards – some of the highest in the world – mean that this will continue to be a very appealing international finance centre. Looking forward to the future, I also think the changes around Brexit may even create further opportunities for Guernsey to look further afield to, say, eastern Asia in terms of opportunities for clients. Those regions will potentially look at Guernsey as a jurisdiction and I think that’s the medium to long-term opportunity for Guernsey in particular. You talked about the Channel Islands being on the list when you wrote down the key ingredients for your move. What, from a personal point of view, made the islands so appealing? Well, first and foremost the Channel Islands are clean and safe, and have wonderful beaches. I’m just thinking from a family perspective there. I also think education is of a very good standard in the Channel Islands. And I’m sitting here looking out over the castle, to Sark and Herm, and it’s an amazing environment. It’s a really special place. Then you’ve got the proximity to the UK and the proximity to Europe. So you have

the best of both worlds – an international finance centre, but a small community, a family environment and just an amazing place to live in terms of work-life balance. What other issues are high on the agenda for Credit Suisse Guernsey right now? Well, one of the things that actually underpins the strategy we have been talking about in some detail is the increasing focus on sustainability. Credit Suisse in Guernsey was one of the founding members of the Guernsey Green Forum – bringing together employers from different sectors and different industries to think about sustainability and share best practice is clearly important to us. So that’s on our agenda – how we can be more focused on the environment and more sustainable for Guernsey going forward. The second thing is that within Credit Suisse there’s a real demand from clients, but also staff, to be more ESG-focused. When I created our sustainability committee earlier this year, 80% of our staff put their hands up to join the committee, which was remarkable. So we don’t have an awareness problem. It’s now about how we harness that passion and get that contribution to really drive a more sustainable business here. And, going back to the subject of community engagement, we sponsored the recent Guernsey schools’ sustainability conference. To go along and hear secondary school children talking about the environment and what motivates them was an incredible experience. As an overall theme, sustainability is an important area of focus for us. It underpins our strategy and over time will become an even more important part of it. n

Businesses across all sectors are reviewing their approach to sustainability, carbon reduction and social impact. The mandate for change is supported by a growing number of global investors who are choosing to create positive change as well as financial returns. We support both grassroots projects and global impact investors. We work with asset managers, fund managers, institutional investors, investment banks, private equity houses, family offices, charities, sovereign wealth funds, HNWIs and intermediaries and provide advice on the legal aspects of sustainable investment and its implications on governance and compliance processes. To find out more, please visit


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Meet Brendan Monks The UBS Global Financial Intermediaries (FIM) team in Jersey, led by Helen Ollivro, has been providing a dedicated offering to discretionary fund managers for more than 10 years. We talked to Brendan Monks, Director and Senior Client Advisor for Jersey, to find out more about him and the FIM team

CAN YOU TELL US A BIT ABOUT HOW YOU CAME TO YOUR CURRENT ROLE? I’ve spent the majority of my working career within the banking industry in a number of management and client-facing roles. I started in retail banking and was able to progress rapidly, managing several teams and gaining valuable experience in delivering good customer service. An opportunity to join a private bank arose in 2012, so I moved into wealth management, working with UK-resident/ non-dom clients. During this time, I also studied with the CISI and gained level 6 industry qualifications. In 2015, I was offered a role on the UBS Financial Intermediaries team. Shortly after joining the company, I adopted a book of fund clients and have been working on banking solutions for Collective Investment Funds ever since.

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HOW HAVE THE PAST 18 MONTHS BEEN FOR UBS FIM? HAS COVID-19 AFFECTED THE BUILDING OF RELATIONSHIPS? UBS was able to act quickly and have all of its staff working from home in a very short period of time. I think that 10 years ago the challenges would have been far greater, but with modern technology, seamless connectivity has been possible and we’ve maintained business as usual. Little things – setting up a

WHAT DOES THE FUTURE HOLD – ARE THERE ANY EXCITING DEVELOPMENTS? Jersey Private Funds (JPFs) have been exceptionally popular since their launch in 2017. On a receptive basis, we are seeing good business whereby investors are looking to pool monies via a JPF that invests in traditional banking assets such as equities, fixed income and funds. I am carrying out market research at the moment with various JPF service providers to listen to what we need to do to be able to further distinguish ourselves from the competition. It’s becoming increasingly obvious that it’s not about

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It’s not about being the cheapest bank – high-quality service really matters

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group chat over Skype, for example – have helped keep the team spirit alive. Aside from technology successes, I’ve been impressed how UBS has brought mental wellness to the forefront, introducing a number of initiatives for the benefit of all employees. The internal communications from the bank have been comprehensive and our team has a daily ‘shout-out’ each morning, which provides a nice touchpoint with colleagues. Our Country Head, Tom Hill, also holds a weekly dial-in on all things Covid-19, and questions are welcomed. It has been possible to maintain existing external relationships, but with the relaxation of Covid restrictions, it will be great to meet face-to-face with existing and new clients. Ultimately, I think Covid has pushed things forwards leaps and bounds and forced changes to work practices that will become normal now.

WHAT MAKES A GOOD FIM DEPARTMENT AND WHAT IS THE MOST CRUCIAL PART OF YOUR ROLE? We need to adapt and overcome issues pragmatically – not just say ‘no’. This is second nature to us and is often required to find solutions for our clients. We have a talented team, with individuals that each have key strengths and deep knowledge reservoirs to draw upon. I remember being blown away by the calibre of some of my new colleagues when I joined UBS and, hopefully, six years down the line, I’m up there with them. In terms of my role, I think my best attribute is being able to assess matters methodically and make decisions. FIM relationships require excellent knowledge of systems, processes and the technical side of things, so that is useful. And it may be obvious but, given the competing priorities and workloads that I deal with, being extremely organised is probably one of the most crucial factors within my role.

TELL US SOMETHING ABOUT YOUR HOBBIES – WHAT DO YOU LIKE TO DO IN YOUR SPARE TIME? I’ve always enjoyed outdoor adventures and being surrounded by nature. I’ve been hiking and climbing since I was a child and this has developed into more serious mountaineering, with the Alps

It’s often only when you’re off the mountain that you fully appreciate the experience

now my favourite playground. Alpinism provides an incredible physical challenge and has sometimes pushed me far beyond what I thought my limits were. I like the fact that at a time when there is an ‘escape’ button in a lot of things in life, mountaineering requires full commitment – if you’re halfway across an exposed snowy ridge you have no option but to continue. It’s often only when you’re off the mountain that you fully appreciate the experience you’ve had. Some of the most incredible scenery is above the clouds. I prefer the path less trodden and my ultimate goal is to bag a first ascent of a peak or set a new route. When I’m in Jersey, I get out most weekends for some rock climbing on our incredible coastline. I’m still discovering new coves and hidden beaches I never knew existed. This keeps me motivated and in shape for the next big adventure. n


Brendan Monks Senior Client Advisor UBS Financial Intermediaries 1, IFC St Helier Jersey JE2 3BX Tel: 01534 701126 Email:

UBS AG, Jersey Branch is authorised and regulated by the Jersey Financial Services Commission for the conduct of banking, funds and investment business. © UBS 2021. All rights reserved.

city edition 2021 15

International finance centres

Shores of certainty

As City firms continue to face instability and confusion from the fallout of Covid-19 and Brexit, they continue to look to the Channel Islands for consistency and high-quality service

16 City edition 2021

International finance centres

Words: Steve Falla THE PAST 18 months have certainly been full of change and uncertainty, fuelled by the double-whammy of the coronavirus pandemic and Brexit. These circumstances have accelerated developments and innovation, as many businesses have rapidly evolved their proposition to continue to satisfy their markets. By contrast, however, financial services firms in the City of London have largely wanted to see more of the same from Jersey and Guernsey. The unpredictable and volatile business conditions have simply increased the steady appeal of the Channel Islands as international finance centres. Their longstanding stability, expertise, established track record and consistency of service all provide relief from the turbulence elsewhere. As a result, it’s generally been business as usual for the Channel Islands’ financial centres. And much of that business continues to be City-led.

QUEST FOR CLARITY Mark Clubb, Senior Investment Manager at TEAM, explains: “City business introducers are confused and waiting for clarity regarding financial services and Europe, specifically around what they can and cannot do. “Both islands have worked hard to be prepared for this, with the aim of protecting their interests and security while maintaining good relationships with the UK – to benefit from the UK-EU Trade Agreement – and to maintain their ‘good neighbour’ status with the EU. “We have to remember that the islands are not, and have never been, a part of the EU – and did not benefit from the UK’s membership except for Protocol 3 (trade in goods). So, for the islands, the relationship has not changed when it comes to financial services.” Sophie Reguengo, Partner at Ogier, takes the point a step further. “I would argue that the appeal of the Channel Islands has actually increased as a result of Brexit and the pandemic. You come to realise who your natural business partners are during these periods of difficulty. “The excellent reputation of the islands is more important than ever, particularly with investments and the drive to support sustainable finance.” That view is endorsed by Simon Burgess, Managing Director and Head of Alternative Investments at Ocorian. “What we are seeing is that London intermediaries advising or representing international capital have a very close affinity with the financial services professionals in the Channel Islands, and a business model that’s tried and tested,” he says.

Clubb adds that the islands’ status as financial safe havens to wealthy people who are looking for asset security in a stable tax environment has become much more important given the imminent prospect of new taxes and the unprecedented issue of government debt. Furthermore, the islands have remained credible business partners for the City by focusing on their core areas of

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International finance centres

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18 City edition 2021

Information about our regulators is available online

International finance centres

TWO-WAY INVESTMENT Anita Weaver, Head of Corporate Services, Jersey, at Stonehage Fleming, says the Channel Islands offer further appeal as a facilitator of market access – and not just from the City into Europe. “We can assist fund structures with accessing European and global markets and enable Europe to still access the City,” she says. “It’s not just one way. The two islands are well placed to utilise their existing networks to facilitate mutual investments in both directions. “Activity levels have increased. There’s interest in the ESG market, infrastructure and real estate. At the back end of 2019, some clients were slowing down on deal activity pending the resolution of Brexit, but they had also lined up deals for 2020.

“Investment activity has picked up again post-Brexit and, with Covid-19, people are looking for a safe allocation of their capital. They’ve had time to think and are being more innovative.” Clubb supports this view. “Whenever there’s change, there also comes opportunity,” he says. “This is certainly true for the Channel Islands post-Brexit. There will be new ways of doing business, through regulation change, and it is also an opportunity to look at how we might improve things within the islands. “Until the UK comes to an agreement with the EU, fund wealth managers may not be able to market funds or services into the EU,” he adds. “Some managers have responded to this by building a presence in Europe. However, many fund managers continue to market Guernsey and Jersey funds in continental Europe using National Private Placement Regimes. We have in place the necessary cooperation agreements to enable them to do so. The islands may be a suitable alternative home for other UK fund managers facing such challenges.” Paul Mundy, Managing Director of Fund Services at Suntera Global, agrees that the hiatus caused by Brexit and Covid has in some respects been a positive. “For once, the money-makers have been forced to sit at their desks as opposed to

The appeal of the Channel Islands has actually increased as a result of Brexit and the pandemic

expertise, in particular the investment fund sector. Initial fears about the impact on funds of Covid-19 were unrealised as the islands stuck to what they do best. Reguengo adds: “We spent a long time preparing for Brexit but there was no time to do the same going into the pandemic. You assume business is going to fall off a cliff, capital flows are going to dry up and investors are going to pull funds – and you are going to get recession-type reactive behaviour. “That was not necessarily the case. Infrastructure was particularly active as an asset class, capitalising on the rise of online shopping, which in turn caused a spike in demand for logistics and fulfilment of commercial real estate. “Our venture capital practice also saw a startling rise in investments in the pharma, health and education technology sectors, given the demands placed on these industries by the pandemic.” Burgess recognises that there have been winners and losers. “If you are capitalrich, now is the time to respond to the opportunities created by the volatility of the past 12 months,” he says. “Hopefully, we are at the trough and the canny investor will buy at the bottom in the hope of selling at the top. Hence the growth of deployment of private capital into our funds sector. This is also driven by a desire to inflation-proof investments and to mitigate risks of capital erosion given the likelihood of higher interest rates and, in turn, inflation.”

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International finance centres

“They will demand more accountability and adherence to environmental and sustainability matters, alongside social impacts such as gender and race diversity and equality,” Clubb adds.


crossing the globe raising capital,” he says. “This additional time will have seen a number push forward with ideas and new structures.” It is here that the Jersey Private Funds (JPFs) regime has come to the fore, with Guernsey offering its own iteration, the Private Investment Fund.

USER-FRIENDLY FUNDS “JPFs are the best product we have by far,” Reguengo says. “It’s codification, amalgamating several products into one very simple, user-friendly commercial product. It’s also a low-cost product with a 48-hour turnaround time to gain consent.” Weaver adds: “They are definitely getting a lot of attention. I am getting lots of inquiries, which is fantastic news. To see the JPF becoming more well known is just great. “It’s essential that fund managers are picking the right jurisdictions that their investors will support. They’re looking for service quality, ease of doing business, track record, digitisation, security and reporting in real time. A jurisdiction that has invested in its technology is also an important factor.” Alongside the recognised strengths of Jersey and Guernsey in the funds space, another area continuing to draw strong interest is the structuring of private client assets. This is particularly the case given the $15trn of intergenerational wealth due to be handed down by 2030 and a

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The islands have remained credible business partners for the City by focusing on investment funds

growing interest in ESG, philanthropy and sustainable investments. The islands are well recognised for their robust trust and property title laws. Clubb says: “It is estimated that more than half the world’s wealth is held offshore. Offshore wealth and asset management, or the facilitation of it, is and will continue to be in high demand from the world’s wealthy, very wealthy and certain organisations such as family offices. “The generations inheriting this wealth will have different values and aspirations in terms of what to do with it. It will change the way this wealth is managed.

Ocorian has seen increased traction for institutional-grade family offices, says Burgess. “They are very institutionalinvestor-like. The governance is high and the approach to investing is equal to that of institutional investors.” Meanwhile, sophisticated solutions are required to meet the complex challenges for the wealthy, Reguengo adds. “A simple trust is unlikely to meet the requirements of large wealthy families with multiple generations, diverse wealth creation and family members located around the world. “We increasingly see the need for bespoke structuring. Some of the new generation want to manage the assets themselves and an investment funds element starts to creep in, combining wealth and asset management.” She continues: “Jersey has a commitment to building a reputation for sustainable finance on a sustainable island. We want to be one of the leaders in terms of being a green island.” These arguments and viewpoints paint a solid picture of the Channel Islands’ ongoing appeal for City partners. But what core message should they be reiterating to their City counterparts? Burgess is concise in his view: “The message is that Guernsey and Jersey are open for business and they are easy to do business with.” Reguengo adds: “We want to be seen as a supportive, collaborative partner – people you can talk to and work with, and be on the same wavelength. Our USP is the ‘G’ in ESG. We do governance and we have high-quality human capital here.” Meanwhile, Mundy re-emphasises the continuing symbiosis between the islands and the City. “Throughout the past 18 months, it feels like the islands and the City have continued to support each other more than before. Be it Brexit or Covid, the reliance both ways is still there and the relationships seem to have strengthened during a difficult period.” n

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Investment loss and Guernsey law: a quick guide Ogier’s Mathew Newman and Kellie Sherwill set out what your first actions should be if you think your trustee or investment manager has incurred a loss on your behalf Check your contract carefully, and understand the wording. Terms of engagement often contain provisions that may purport to set out the services that the trustee or investment manager have agreed to provide, indemnify them (particularly in the case of trustees), release them from liability and limit the amount of damages that the trustees or investment manager may be required to pay if they become personally liable for any loss. The general legal position is that trust instruments may provide that the trustee shall be released from liability and indemnified out of the trust fund, provided it has acted honestly and in good faith. Based on this approach, it may be possible, subject to statutory restrictions in the applicable jurisdiction, for a trust instrument to relieve a trustee from liability, or even indemnify a trustee out of the trust fund, for loss arising as a result of its own gross negligence. Understand what the general global conditions are like for investments. It is critical to take the time to research what factors may have an impact on your investments so that you are able to make informed decisions. Understanding what’s going on in the market, both domestically and globally, is important because it may have an impact on your investments. This can include issues such as growth, unemployment rates, interest rates and inflation and even political events. Don’t wait too long or you might run out of time. The prescription period for contractual and tortious claims is six years from the

date on which the cause of action accrued (save in respect of personal injury, for which the period is three years). For breach of trust claims, the limitation period is three years from the date of knowledge of the breach – save that no prescription period will apply to an action brought against a trustee in respect of any fraud to which the trustee was privy or for any action to recover trust property. Prescription periods are stopped from running at the point at which a summons is provided to HM Sergeant for service. There are four reasons why you might not end up having a claim: 1. Limitation In Guernsey, this is called prescription. If you are suing a trustee, you only have three years from the date of breach in which to sue, starting from when knowledge is accrued. If it’s an investment manager, then that’s a contractual relationship and you have six years, but it depends when the loss occurred and knowledge is a relevant factor. If you miss this window, your claim will be time-barred unless you can show a good reason as to why it was not possible to bring the claim within the required timeframe (and even then the claim may still be refused due to limitation). 2. Due diligence Much turns on the extent of the due diligence performed by the trustee or investment manager as a professional and regulated entity, and the appropriateness of the investment. This will include all documentation and information relating to the investment, which can be delegated if their powers allow.

3. Trust instrument or investment management contract It may have an exculpation clause in there, so the trustee or investment manager is not liable for certain acts or omissions depending on what the contract says. They may well seek indemnification from the beneficiary in respect of any losses, so you have to be careful in looking at the relationship between the parties. That said, in the matter of Manita Khuller v First International Trustees Ltd, Court of Appeal [2020], the trustees had attempted to rely on the trust deed that contained provisions to protect them from liability except arising from their wilful misconduct or gross negligence. The trustee was found to have been grossly negligent in appointing an unregulated adviser as they had not properly delegated their responsibilities. 4. Loss This is a substantive point – have you actually suffered a loss? You may think that, on paper, your investment has gone down, but does that just reflect the market? Could it have been avoided? Your investment manager may have done all they could to shore up the position. In order to be successful in bringing a claim, you will need to show that there was a breach that caused the loss as a starting point, as this is the case for negligence. n


Mathew Newman is Head of Ogier’s Dispute Resolution team in Guernsey, and Global Head of Restructuring and Corporate Recovery. Kellie Sherwill is an Associate in Ogier’s Dispute Resolution team in Guernsey.

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Sustainable investing

The Guernsey and London Green Finance Initiative was launched with great fanfare – promising to bring the two jurisdictions together to drive sustainable investing options. So how has it fared, and is it making a difference? IT’S NOW A full two years since the Guernsey and London Green Finance Initiative launched, marking a commitment by the two jurisdictions to further cement relationships and work together to fight climate change and accelerate green transformation. Speaking at the Guernsey Funds Forum event in London that year, Sir Roger Gifford, Chair of the London Green Finance Initiative, who sadly passed away recently, thanked Guernsey for its contribution to finance solutions for climate change. This included the world’s first regulated green fund product, the Guernsey Green Fund – launched in 2018. He also stressed that finance could be a catalyst for a change in the way we live for the better. The stakeholders involved promised urgent and immediate action in what was heralded as a landmark agreement that would shape the relationship between the Channel Islands and the City of London for decades to come.

STRONG FIRST STEPS The agreement between the two jurisdictions quickly delivered tangible outputs. In April 2019, for example, the Bluefield Solar Income Fund achieved accreditation as a Guernsey Green Fund, becoming the first fund listed on the London Stock Exchange to do so. “There’s now approximately £4bn assets under

Words: James Tall management (AUM) in Guernsey green funds and it’s growing,” says Annette Alexander, Partner, Carey Olsen. “What this has shown us is that there’s a real appetite for robust and transparent products that can be used to channel funds into investments that help combat climate change, and at the same time give investors peace of mind in knowing their money is properly invested in climate change mitigation.” Deloitte Director of Risk and Regulation Sally Rochester, who leads the Channel Islands’ commitment to net-zero carbon by 2030, also highlights an impressive start. “In Guernsey, we’ve made significant progress in the green finance agenda,” she says. “We’ve developed several world firsts, including the world’s first regulated green fund regime and the world’s first catastrophe bond, issued via a Guernsey ILS structure. “Our regulator has also updated our Code of Corporate Governance to include consideration of climate risk, which will encourage boards to prepare for a future in which green considerations and disclosure are likely to become an important part of international standards.

Beyond green shoots 22 City edition 2021

Sustainable investing

One of the advantages of the Guernsey Green Fund is that it is designed to prevent greenwashing

Jersey is also turning up the dial when it comes to green initiatives. Mirek Gruna, Chief Commercial Officer, IQ-EQ, is well versed on the topic. He’s working with family offices to set up family structures that have a clear focus on impact investing – that want to create a policy to invest in businesses that create stakeholder value and sustainability. “Jersey has already implemented a clear roadmap to sustainability, introducing a sustainable finance strategy in March 2021,” he explains. “The strategy sets out a clear path for Jersey to be recognised as a centre of sustainable finance in the markets that it serves by 2030. The island’s stakeholders have realised that in order for Jersey to take the lead as a globally recognised sustainable finance centre, there needs to be a strong strategy and direction, as well as a government target for carbon neutrality.”

NAVIGATING THE PANDEMIC The Covid-19 pandemic, which has lingered for far longer than initially expected, has touched every aspect of people’s lives. This includes attitudes to, and appetite for environmental, social and governance (ESG) considerations and ‘truly’ green funds. “The pandemic seems to have increased the priority of ESG on the agenda and the space has become more active over the past 18 months,” says Danielle McIver, Vice Chair, ICSA. “ESG has become a bit of a buzzword, but there has been increased demand in Guernsey for ESG expertise to support clients. ESG qualifications targeted towards finance professionals have recently been launched to aid this demand for expertise, such as the CISI certificate, with firms on the island electing to put their staff through such courses.” Alexander agrees that the pandemic has expedited the shift towards the green

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“It’s also important to point out that the theme for the Guernsey Sustainable Finance Week in June 2021, aligned with the programme for COP26, was mobilising private capital for the sustainable agenda. “Sir Roger Gifford had been due to speak at the event before his recent untimely passing, but his friend and colleague Claire O’Neill kindly stood in for him and delivered a touching tribute to all of his fantastic work devoted to the green finance cause.” In March 2021, a thematic review of the Guernsey Green Fund regime and the release of a Spring Green Consultation Paper by the Guernsey Financial Services Commission further reinforced the island’s status as a leader in sustainable finance. It found the regime provides a robust and transparent product, demonstrating independent validation to current and potential investors that its objective of mitigating environmental damage results in a net-positive outcome for the environment.


Balance is in our nature Effectively managing fund administration and accounting for a range of asset classes requires balancing responsibility with ambition, prudence with passion, and heritage with vision. We provide a comprehensive range of bespoke fund services delivered from our Jersey, Bahamas, Cayman and Isle of Man offices. We have the expertise to administer both closed and open ended funds across all sectors and our highly experienced funds team provides tailored services to support the needs of fund managers and investors all over the world enabling them to achieve their goals. Contact Paul Mundy Managing Director, Fund Services Division Tel: +44 1534 732299 Bahamas

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Sustainable investing agenda by giving people time to pause and reflect on the magnitude of the issues we face from a climate change perspective. She adds: “There’s an imperative now not just to ‘build back better’ but to use this opportunity to build back greener too.” Naysayers continue to raise the spectre of ‘greenwashing’ in the funds sector, citing marketing spin to persuade the public that an organisation’s products and policies are environmentally friendly. “Investors are right to be concerned about greenwashing,” says Rochester. “Deloitte is working with clients to both address the risk of greenwashing and to provide assurance for those in the investment industry who want to give comfort to investors over compliance with their chosen framework. “The reality is that investor and stakeholder expectations are evolving rapidly and what would have been seen as ‘green’ a few years ago is really being challenged by more knowledgeable investors who demand transparency and support active managers who look to challenge the board to do more to support the transition to net zero.” Alexander points out that one of the advantages of the Guernsey Green Fund is that it is specifically designed to prevent greenwashing. “The fund must be invested with the aim of mitigating environmental damage resulting in a net-positive outcome for the environment,” she explains. “The assets need to be invested 75% in accordance with the Common Principles for Climate Mitigation Finance Tracking

and the other 25% must not lessen or reduce the objective of mitigating environmental damage; and it’s prohibited from being invested in certain assets, such as uranium mining for nuclear power. “What’s more, the investments in a Guernsey Green Fund must be independently certified – either by a third-party certifier or by the licensed and regulated fund administrator – both at the outset and on an ongoing basis to ensure that greenwashing doesn’t occur.”

LOOKING TO THE FUTURE The Channel Islands are building on their strong start. There are now 12 green funds in Guernsey, for example, with several more in the pipeline. “ESG is certainly firmly on the agenda of most fund managers that structure through Guernsey,” says McIver. “Guernsey has established itself as a ‘green financial centre’ by creating specific products, including the Guernsey Green Fund and the green segment of The International Stock Exchange. “Provision of certified products like this promote Guernsey as a jurisdiction for transparency in the green space.” The ethos behind the Guernsey and London Green Finance Initiative continues to see the two jurisdictions push the sustainability agenda forward. Alexander points to numerous podcasts and research papers on sustainable investing, such as collaboration on the London School of Economics and Political Science (LSE) Sustainable Finance Leaderships series, a

forum for leading voices to present their experience and put forward new ideas on how to accelerate progress. Tim Clipstone, an experienced funds, regulatory and corporate lawyer at Ogier, points to upcoming regulatory alignment that will further strengthen Guernsey’s green credentials. “We’re seeing a constant stream of new green funds and fund-like investment structures, many of which are relying on their own credentials rather than looking for a green kite mark,” he explains. “However, this is likely to change when the EU’s regulations on taxonomy and sustainability-related disclosure in the financial services sector become fully operational, when the green criteria of the Guernsey Green Fund should directly align with a number of the EU’s environmental objectives – including, in particular, the objective of climate change mitigation.” Gruna also sees encouraging signs in Jersey. “We have a number of clients actively engaged in ESG, philanthropy and impact investing,” he says. “One example is our work with one of our private clients on the creation of a network supporting women in education, empowerment and management of their own wealth. “As trustees, we ensure that the wealth that we look after for them provides further benefits to society.” The momentum is clearly building across both London and the Channel Islands, as the jurisdictions work together to become international leaders in the burgeoning green finance space. n

Ones to watch A number of fund managers and family offices are active in the ESG space across the Channel Islands. Firms to watch include: ● Earth Capital – a global private equity investment group focused on sustainable investing – its Nobel Sustainability Fund has been designated as a Guernsey Green Fund ● True North Real Estate Partners – recently launched its first fund, the Forestry Carbon Sequestration Fund ● Bluefield Solar Income Fund – an investment company focused on the acquisition and long-term management of a diversified portfolio of low-carbon assets in the UK ● Foresight Solar Fund – a Jersey investment company investing in a diversified portfolio of ground-based solar photovoltaic assets in the UK and Australia.

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Eyes on the prize

Words: Gill Wadsworth

With marketplaces and tech firms scoring big during the pandemic, calls have resurfaced for a global tax rate that will ensure the ‘Silicon Six’ pay taxes where they make their money. but What would that mean for the Channel Islands? And how close are we to it becoming a reality?

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ONE OF THE big winners of the pandemic

has been online marketplaces – as people turned to online purchases to fill the gaps left by closed shops and barren high streets. It will come as no great surprise that during that lockdown period – and largely through its ability to deliver almost anything from its cavernous website within 24 hours – Amazon was the biggest winner of all, with €44bn in online sales in 2020. What may come as a surprise to some, however, is that the world’s biggest online retailer paid zero tax last year. The reason for this lies in Luxembourg, where Amazon has its HQ and where the retailer registered a loss that negated the billions of euros it made in the rest of Europe – meaning it was on the hook for precisely nothing. Amazon is not alone. Figures from the Fair Tax Foundation covering the decade to 2020 reveal that the retailer, along with five other tech firms – Facebook, Alphabet, Netflix, Apple and Microsoft, known together as the Silicon Six – paid $149bn

less to global tax authorities than would have been expected if they had paid the headline rates where they operated. So have the Silicon Six been getting away with it for too long – and is the game finally up when it comes to tax avoidance? After all, their pervasive – and costly – refusal to honour the spirit of tax systems is now driving plans by seven of the world’s richest nations to impose a minimum corporation tax on multinationals.

POLITICAL PUSH At the G7 summit held in Cornwall at the start of this summer, US President Joe Biden led the calls for a global minimum corporate tax rate of 15%, designed to target those multinationals that are currently based in low-tax jurisdictions to avoid paying their dues. The push follows a Pillar One and Pillar Two Blueprint published last October (see boxout overleaf), which set out proposals for a global tax system that would counter what the OECD calls base erosion and

profit shifting (BEPS). However, the details are undecided, with G7 finance ministers still to meet – at the time of writing, at least – to finalise plans. Joe Moynihan, Chief Executive at Jersey Finance, says: “The reality is that these proposals have been ongoing for months – years, in fact – in an attempt to try and tackle large multinational profit shifting, and ensure that in particular the big global tech companies pay tax in the places where they do business.” However, the fact that officials and business have been aware of the rules for a while does not make it any easier to get to grips with the potential changes. For businesses based in the Channel Islands, there may be even more to come to terms with, operating as they do under the ‘zero 10’ regime. Introduced in 2009, the system means that most companies locally pay 0% corporation tax on their profits, with financial institutions paying 10% – a far cry from the rules in the UK and across much of Europe.

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Corporation tax

Corporation tax

Any reforms must be implemented on a level playing field, balancing the interests of small jurisdictions as well as larger ones

In May, just after Biden reiterated plans for a minimum tax rate, Jersey officials wasted no time in showing their disdain. Chief Minister John Le Fondré told the media that the US should “look closer to home” and focus on its own tax avoidance issues before “telling the rest of the world what to do”.

CALM AFTER THE STORM? Despite that initial reaction, there has been more amenable rhetoric from islands officials in recent weeks. Moynihan says: “The proposed changes have the potential to affect all countries, and it is absolutely our belief as a jurisdiction that any reforms must be implemented on a level playing field, balancing the interests of small jurisdictions as well as larger ones, developed as well as developing countries.” While the final details are thrashed out behind closed doors at the highest levels, there are two key advantages for the Channel Islands in mitigating the impact of the proposed tax regime. First is its minimal reliance on the big tech companies at whom the regulations are squarely aimed. Instead, the islands are home to businesses attracted by the local services rather than the mega tax breaks. Paul Hodgson, Chair of the Guernsey International Business Association, explains: “As has been the case for some time, new business locally is more likely to be attracted to the jurisdiction by the quality and capabilities of local service providers, strong existing relationships or the characteristics of our regulatory environment, than being principally around tax.” Second is the possibility of exemptions – or ‘carve-outs’ – for the funds industry, which would be of notable significance for the islands. Jersey alone manages

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Pillar One and Pillar Two Tax, apparently, does not have to be taxing, but there is nothing straightforward about the Pillar One and Pillar Two Blueprint. Everyone from top accountants to senior finance officials concede that the plan to move to a global minimum corporate tax rate is going to be challenging. Pillar One applies to digital and consumer-facing businesses. It is broad in scope and requires a portion of multinationals’ residual profit to be taxed in the jurisdiction where revenue is sourced. Tom Cowsill, Tax Director at PwC, describes the Pillar Two rules as “extremely complex” but adds: “In short, they seek to ensure that certain multinational entities are subject to a minimum effective tax rate, irrespective of the jurisdictions in which they operate.” Jo Huxtable, Tax Partner at Deloitte in Guernsey, notes that 131 countries have agreed the key components for changes to the international tax framework, including a global minimum tax of at least 15%. “The global minimum tax rules will apply to large businesses regardless of their sector,” she says. “There are exclusions for investment funds, pension funds, government bodies and not-for-profits.” Huxtable explains the proposals on the technical design of the rules: • The income inclusion rule and the undertaxed payments rule – connected rules intended to ensure large multinational groups pay tax at a minimum level in each country in which they operate. These share common rules for scope, and for calculating effective tax rates and top-up amounts. The minimum rate will be at least 15%. • The subject to tax rule (STTR) – a separate rule that applies in priority to the income inclusion and undertaxed payments rule. Paying (source) countries will be able to charge a top-up tax in respect of specific types of intra-group payments made to other group companies, where the recipient country has a nominal tax rate less than a minimum tax rate. The minimum rate will be from 7.5% to 9%. The rule is applied on a payment-by-payment basis but may be calculated and administered by way of an annual return. • The global tax rate will be considered on a jurisdiction-by-jurisdiction basis. more than $500bn in investment fund capital. However, Jo Huxtable, Tax Partner at Deloitte in Guernsey, comments: “Currently, the Pillar Two Blueprint has no industry or sector carve-outs, but it does include carve-outs for investment funds, pension funds, government bodies and notfor-profit organisations.” The islands will need to wait for the final details before celebrating any exemptions for the fund industry as a whole. Given the uncertainty and lack of detail around the proposals, Tom Cowsill, Tax Director at PwC, believes it is not possible to put any kind of timeframe on the changes – although he remains confident that they will happen. Cowsill says: “There is strong momentum to change but there is a long way to go and a lot of political discussions

to be had – the pace of legislative change is getting quicker.” Cowsill notes that the EU is already planning to introduce the tax regime via two Directives. In the meantime, businesses across the islands, and the financial officials who oversee them, will have to bide their time as they wait for more definitive plans for a globally aligned tax regime. Moynihan concludes: “The progress now being made is significant and important, and we remain fully engaged with the key bodies involved as things progress over the coming weeks and months and as the full details are agreed internationally. But that may take some time.” For the time being at least, it seems that the international tax debate is still a watching brief. n

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Guernsey prepares to demonstrate its substance It’s been two and a half years since changes to Guernsey’s rules on corporate tax residency were introduced but, with the 2020 tax filing deadline extended to early 2022, it will take a little longer for the full impact of the new legislation to be felt. Ivor Bisson, Global Tax Reporting and Client Projects Manager at Trust Corporation International, outlines what’s happened so far and how the regulations stand Guernsey in good stead on the international stage THE G7’S AGREEMENT in principle to

a global minimum corporate tax rate for tech companies made the headlines in June and was labelled an ‘historic’ deal. But despite all the fanfare and pronouncements from those involved, the real significance of the agreement may be that it has taken an established part of the global finance system – international transparency and reporting standards – and brought it into the mainstream. If not quite under the radar, then certainly away from the glare of the mainstream media spotlight, the OECD and other organisations have been working to create a more level playing field for global businesses for many years. Guernsey has been just as involved in this movement as one would expect a reputable, mature international finance centre to be, announcing its own headline measures in the summer of 2018.

International established a project in 2019 to assess the impact of the new requirements on our client entities and to introduce additional procedures. Through our director-led service offering, we were able to quickly inform clients of the changes and the impact on them. We have a close relationship with clients and intermediaries and our contacts use Guernsey precisely because it’s a reputable jurisdiction; they welcome any moves the island makes to comply with international standards and meet the growing demand for global transparency. Unfortunately, best-laid plans often go awry, and so it proved when the Covid-19 pandemic gripped the world in 2020. In response, the Guernsey Revenue Service (GRS) extended the tax filing deadline from 30 November to 28 February and, following a second lockdown in Guernsey, to 31 March 2021.

SUBSTANCE ON THE AGENDA Guernsey’s rules on corporate tax residency changed on 1 January 2019, widening the definition of residency to include foreign companies centrally managed and controlled in the island, while at the same time implementing economic substance requirements. The substance regulations were designed to address concerns raised by the EU Council and the Code of Conduct Group that companies could be used to artificially attract profits that are not commensurate with economic activities and substantial economic presence in the relevant jurisdictions. Guernsey, Jersey and the Isle of Man worked closely together to introduce legislation aligned to their existing income tax laws to produce common guidance. Trust Corporation

Guernsey’s substance regulations are a clear indication that the island takes its global position seriously

This was widely welcomed by all concerned, as it gave more time to prepare the more complex tax return for thousands of foreign incorporated companies not previously tax-resident in the island.

SERIOUS ABOUT SUBSTANCE Despite the reporting delays caused by the pandemic, Guernsey remains committed to meeting its substance obligations. Indeed, it is extending its regulations shortly to include partnerships, with more information expected soon. The helpful guidance issued by the GRS made it clear that a pragmatic approach will be taken when assessing the impact that government-imposed restrictions have had on the ability of companies to meet the ‘directed and managed’ test. It also highlighted the expectation that companies will have continued to meet the other substance tests during 2020. Guernsey’s substance regulations are a clear indication that the island takes its global position seriously and that it is committed to delivering high-quality corporate services within an internationally recognised transparency framework. Which is just as well considering the global trend towards creating a level playing field. There is no doubt that Guernsey can continue to be a respected and reputable partner for the City of London in the coming years – and the substance regulations are just one way of reinforcing the island’s reputation. n


For more information on how Guernsey entities are setting the standard, get in touch with Trust Corporation International: Tel: +44 (0)1481 730430

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Real estate investment trusts

30 City edition 2021


Real estate investment trusts

on success

In recent years, a swathe of UK real estate investment trusts have listed on the Channel Islands’ International Stock Exchange. So why are the islands so attractive to UK REITs – and what sets them apart from listing in the City?

UK REITS – REAL estate investment trusts – have been one of the Channel Islands finance sector’s great success stories in recent years. Earlier this year, The International Stock Exchange (TISE) announced that it had become the listing venue for more than 40% of all UK REITs – 37 out of a total of 90 – with eight joining the exchange by the end of May. The overall total has risen from a 25% market share in 2016 and 30% two years ago. TISE has established itself as a clear

platform of choice for new REITS coming to the market. In addition to the listings, a significant proportion of REITs are incorporating in Guernsey and Jersey, drawing on an evergrowing body of expertise in the islands among lawyers, administrators and other professional advisers. And while the underlying value of property assets held by REITs either listed or domiciled in the Channel Islands is difficult to quantify, it certainly runs into many billions of pounds. For most investors, property owners or fund managers who opt to form a UK REIT, the primary choice is between listing it on the London Stock Exchange or on TISE. A couple are listed elsewhere – one on the Aquis Stock Exchange (AQSE) and one on the International Property Securities Exchange (IPSX). The decision to opt for the Channel Islands will depend primarily on the nature of the REIT concerned. Robert Milner, Partner at law firm Carey Olsen, set up some of the first REITs on TISE and sits on the committee that helped draft the listing rules. “The REITs

Words: Alexander Garrett

city edition 2021 31

Real estate investment trusts

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32 City edition 2021


Scan here, or visit

Real estate investment trusts

that will find the happiest home on TISE are those that are set up for the benefit of institutional investors – sometimes only a couple of institutional investors – and those that are set up and marketed solely at sophisticated investors, with limited trading,” he says. Milner points to one of the main advantages of TISE. “It recognises that, where you’ve got a structure that has a small number of institutional participants, a proportionate approach can be taken to forensic disclosure.”

COST AND FLEXIBILITY One specific advantage for the institutionally owned REIT, Milner explains, is that on TISE there is no applicable equivalent to the London Stock Exchange’s free float requirement, which means that 25% of all shares must be available to the public to buy. TISE has recognised that institutional investors can represent a large number of underlying beneficial owners, in line with HMRC’s own approach, he adds. Nick Terry, a Jersey-based Chartered Surveyor and a Director of the real estate team at Ocorian, believes cost and

flexibility are fundamental advantages to listing a REIT on TISE as opposed to the LSE alternative. “Cost is a significant factor, especially for a smaller REIT, which could even be formed to own a single asset such as a London office building owned by three or four underlying investors,” he explains. At the same time, the role that TISE plays for REITs has evolved, says Terry. “You previously saw TISE being used effectively as a technical listing in order to qualify as a UK REIT, but more and more it’s being used as a platform for a real traded listing.” Historically, says Terry, if someone wanted to use a REIT to raise capital, they would have tended towards a London listing on the FTSE 100, FTSE 250 or AIM. “What you’re seeing a little bit more now is that TISE is starting to attract structures that are looking to raise capital, because it’s becoming better known and it’s cheaper, easier, well regulated and so on.” The latest figures suggest that TISE is gaining momentum in terms of its ability to attract REIT listings. James Hill, Partner and specialist adviser to the UK real estate sector at Mourant

in Jersey, says: “I think it’s a combination of increased interest in REITs among institutional investors and the attraction of TISE for those sorts of REITs. “Some of it goes back to the UK government, which has been keen to make the UK an attractive location for holding real estate assets. It has been seeking, through its policies to attract global capital, to support some of the changing dynamics in the UK’s society and economy. “So, on the one hand you have the growth of the build-to-rent sector, which requires institutional support. And then you have the changing nature of the economy, and the growth in logistics assets to reflect the growth in the digital economy.” UK and overseas institutional investors helping build out those assets are attracted to REITs, says Hill. Three years ago, TISE amended its listing rules to attract more of these structures, Hill adds. “The listing rules are now simple, precise and offer a lot of certainty. So TISE has played an important part in terms of seeing the demand and then adapting.” Nevertheless, TISE is not suitable for all REIT listings, says Milner. “The main disadvantage of TISE is that there’s

city edition 2021 33

the islands can adapt quickly according to demand from the market, London can’t

Real estate investment trusts

If you want 10,000 investors on day one, it’s probably worth the cost and hassle of going to the LSE

not as much liquidity in the market as there would be in London – that’s just inescapable,” he says. “So, if you need genuine deep liquidity, then you would probably go to LSE; TISE is not really suitable for – and does not target – retail structures. If you want to have 10,000 investors on day one, it’s probably worth your while to undergo the cost and hassle factor and go to the LSE.” For the Channel Islands, a decision to incorporate a REIT in Jersey or Guernsey represents a second bite of the cherry. “The REIT must be tax-resident in the UK but does not have to be incorporated in the UK,” says Hill. “Jersey and Guernsey companies are quite attractive for institutional investors. We have flexible companies, law and regulatory regimes, and these are well respected jurisdictions that are familiar to the London market.” With these attributes in mind, it can make sense to consider the option to incorporate if you are listing on TISE, Hill says. “If you are already engaging with us to do the listing, then why not add it on?” Anyone setting up a Jersey or Guernsey-based corporation needs legal advice, a listing sponsor and a corporate administrator. All three can be provided under one roof by firms in Jersey, adds Hill, alleviating the need to shop around.

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Channel Islands companies offer other benefits. “One is being able to make distributions on a cashflow basis, which you can do under Jersey and Guernsey law,” says Terry. “It basically means you can get your rent in, you know what your costs are for the next 12 months, and so the rest you can push out to your investors as a distribution. “Just about anyone, whether a pension fund or an individual, ultimately makes investments in real estate because they want the income return. And so being able to move that money efficiently up the structure is very, very beneficial.”

FLEXIBLE STRUCTURE UK REITs offer a structure that serves different types of property equally well – from offices and warehouses, to retail, nursing homes and student accommodation. And that is reflected in the nature of the REITs that have listed and incorporated in the Channel Islands. Hill picks out two sectors – ‘sheds and beds’ – as being in favour among investors at the moment. That comprises logistics facilities on the one hand, and various forms of accommodation – from build-torent to student housing – on the other. “The REIT structure works well with pretty much any class of UK real estate, but you can only have so much development

component – because the UK rules state that a certain proportion of your income has to be rental income,” says Milner. “So we tend to see portfolios of fully developed, fully let properties where there’s maturity and stability in the portfolio.” What’s clear is that there is a lot more REIT activity in the pipeline, whether that be through the formation of entirely new REITs or the conversion or even migration of some existing structures. Among those joining TISE this year is RDI REIT, which moved from being listed on both the LSE and the Johannesburg Stock Exchange after being acquired by Starwood Capital Group for £467.9m. Carey Olsen advised Starwood on the acquisition, and says moving to TISE enabled RDI to retain its REIT status after it could no longer comply with the listing rules of the other stock exchanges under its new ownership. The REITs success story in the Channel Islands looks set to continue – but is there a lesson that can be learned from that? “I think it’s an example of the Channel Islands playing to our strengths, which is that we’re small jurisdictions and are therefore nimble,” says Hill. “We are able to adapt legal and regulatory requirements very quickly, according to demand from the market, whereas London can’t.” n

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Why do you need a Jersey lawyer? Jeremy Heywood, Partner and Head of Dispute Resolution at BCR Law LLP, explains how a specialist Jersey-based law firm can help

JERSEY IS ONE of the world’s best known

and most respected financial centres. The success of Jersey on the international financial stage is a result of many factors, not just a competitive business tax regime. London is just an hour away, giving excellent access to Jersey for professionals and clients from the UK, Europe and the wider world. The island’s regulatory framework has been endorsed by the OECD, the EU, the IMF and MONEYVAL. Jersey also offers an excellent quality of life, benefiting from miles of glorious beaches, award-winning restaurants, top-quality schools and a rich cultural and heritage scene. This, and the enhanced work/life balance that comes with it, helps the island to attract and retain some of the best talent in the world. Integral to the success of the finance industry is the support it receives from experienced and specialist lawyers. BCR Law is well used to working as part of a team with colleagues from City firms (and firms based elsewhere in the world) on trust and financial services matters. That may be as part of an M&A transaction, corporate restructuring, the settlement or administration of trusts, or dispute resolution arising out of commercial or trust matters. There is, however, more to Jersey than the financial services sector. There is also a broader need for local expertise in legal services.

LOCAL INSIGHT From a non-contentious perspective, commercial contracts, commercial property, employment and regulatory advice are all areas in which specialist local knowledge can prove invaluable. Where a foreign business wishes to establish an office or a branch in Jersey, advice will be needed on local employment law and to obtain the necessary housing consents for key employees. Commercial premises will have to be obtained, whether purchased or leased. Commercial contracts will need to be

negotiated, drafted and reviewed to ensure that they achieve their purpose. BCR Law is able to assist with all these matters and guide clients through the local regulatory framework for their particular business, offering advice and assistance at every stage. For private clients, Jersey lawyers’ expertise will be essential for the establishment and administration of trusts, the structuring and protection of family wealth and the achievement of philanthropic and charitable aims. Cross-border probate, as well as international and offshore wills and will trusts for Jersey residents, are areas where local knowledge is key. BCR Law offers a fast-track service to reseal UK grants of probate and letters

We have expertise in trust disputes and obtaining injunctive relief in support of foreign proceedings

of administration and can assist with applications for Jersey probate for foreigndomiciled individuals and to register foreign powers of attorney.

FAMILY LAW Family law is another area where Jersey law expertise is crucial. Our family law team has extensive experience of advising about Jersey law pre-nuptial and postnuptial agreements. It also deals with all issues arising out of cross-border divorce and the dissolution of civil partnerships, including the treatment of Jersey situs assets and assets held in a Jersey law trust, and issues concerning the care and residence of children. When things go wrong, clients can draw comfort from the fact that Jersey has a strong and independent judiciary, as well as a thriving bar of experienced courtroom advocates. The dispute resolution team at BCR Law prides itself on its written and oral advocacy. While we have a broad range of experience across civil and commercial disputes, we have particular expertise in trust disputes and in obtaining injunctive relief in support of foreign proceedings. BCR Law is able to assist with any Jersey legal issues faced by companies and individuals across the complete spectrum of legal services. We offer a professional but personal service to clients and we also enjoy working as part of a wider team with our colleagues in the City to achieve the underlying client’s aims. If you think you have need for Jersey legal advice, just pick up the phone – we’ll be happy to talk through the potential issues with you. n


Jeremy Heywood, Partner and Head of Dispute Resolution, BCR Law Email: Tel: 01534 760851

city edition 2021 35

Gender equality

Entrepreneurial equality Although the female labour force hit a 33-year low in 2021 as a direct result of the pandemic, it is hoped this will spark a boom in female entrepreneurship. But what are the challenges women face when they start out on their own? And what support is available to them?

36 City edition 2021

Gender equality

THE UNIQUENESS OF the current climate has been felt in many ways. But one area that has not grabbed many headlines is how Covid-19 has disproportionately affected the different genders when it comes to employment. PwC’s annual Women in Work Index, which measures female economic empowerment across 33 OECD countries, found that by the year-end, progress for women at work could fall back to 2017 levels1. Part of the reason is that when the Covid stay-at-home orders proliferated, women carried the heavier burden of unpaid care and domestic work, leading them to reduce their employed hours or even leave their jobs. As worrying a trend as that is, there may be an upside to this vast inequality – with more women taking time to reflect on the direction of their careers and many opting to pursue their own business ventures as a result. This is being affectionately referred to in business as a ‘shecession’. The trend certainly makes sense. Entrepreneurship, after all, solves many of the career-based problems that were exacerbated by Covid-19. These include the chance to work for oneself, and therefore not be beholden to the wants and needs of the hierarchical systems found in most corporates, as well as greater flexibility and even purpose. A survey conducted by UBS in late 2020 suggested that 76% of women felt more optimistic about owning a business,

compared with just 66% of men2. Meanwhile, a recent study by Boston Consulting Group revealed that, for every $1 of investment raised, women-owned start-ups generate $0.78 in revenue – compared with $0.31 for male-run businesses3. Wendy Dorey worked in large corporates before founding Guernsey-based Dorey Financial Modelling in 2013. She has a clear view on why female-led businesses tend to do so well. “I’m probably generalising here, but I think we’re a bit more aware of the risks and are therefore less risk-embracing than some male entrepreneurs,” she says. Nichole Culverwell, Director of Guernsey PR firm Black Vanilla, adds: “We know through research that large companies with female leadership, female executives and females on the board do very well. We know that diversity is better for business overall, and that’s not just limited to gender – it’s broader than that.”

Venture capitalist bias is in-built – men get asked around the upside, women around potential pitfalls

Despite these views, the female entrepreneurial career path is not without its challenges. The largest hurdles for women looking to found and run their own enterprise are financial. According to the Alison Rose Review of Female Entrepreneurship4, women launch businesses with 53% less capital than men, are less aware of funding options and are less likely to take on debt. And in 2020, found the Harvard Business Review5, only 2.3% of global venture funding went to businesses with all-female teams, which limited their ability to scale up.

TACKLING THE DISCONNECT Dorey is all too aware of what she describes as a disconnect between the level of success that female-led businesses see and the level of investment they receive. “I recently came across some interesting research around the bias in the kind of questions asked by investors, based on whether they are speaking to male or female entrepreneurs. “When the European Institute of Innovation and Technology analysed conversations between VC finance providers and startups, two-thirds of the time they would ask women questions on prevention issues – what can go wrong – and two-thirds of the time they would ask men questions on promotion – for example, how investor gains could be maximised.” As a result, Dorey adds, male entrepreneurs can raise up to five times as much funding compared with their female counterparts. Dorey maintains that this demonstrates that bias is in-built – men get asked around the upside, women around potential pitfalls. “A lot of the time, VCs are run by

city edition 2021 37

Words: Sophie McCarthy

Gender equality

Having a diverse group in the workplace and in government will help secure any country’s future men,” she adds. “So, when you’re a startup and you’re speaking to people about raising funding, a lot of the time you are presenting to men.” Dorey cites an online personal shopper for children. “Their customers are mostly women, but because the investors are mostly men, it’s really difficult for them to connect – both to the product and to the panel of people presenting to them, who are all female. “I think it’s important to have as much diversity as possible, so that when these people are hearing from start-ups, they can better relate due to having a broad set of individuals evaluating them.”

ADDRESSING THE PROBLEMS In response to these disparities, there’s been an increase in the number of organisations being set up to help tackle the issues faced by female entrepreneurs. SheEO, for example, is a ‘crowdsupported ecosystem’ that provides interest-free loans to women-identifying and gender-non-conforming entrepreneurs working towards sustainability goals. And AllBright is a funding and education network designed to provide the support and finance needed for female-led businesses to launch and scale. “The entrepreneurs we support at SheEO are working on the world’s to-do list,” says Vicki Saunders, the serial entrepreneur who founded the initiative. “They are committed to creating more equitable systems and think deeply about how to do business in a way that’s humane and life-enhancing. These kinds of ventures are perfectly placed for the times we are in. “Most women and non-binary entrepreneurs have been put to the margins for decades, and so have a unique perspective outside the centres of power. This is where innovation comes from. It’s a competitive advantage to be a woman and non-binary founder these days.”

Dorey, meanwhile, explains that she has personally benefited from the support of Channel Islands-based initiatives. “Startup Guernsey, which is now part of Digital Greenhouse, was very much set up to help incubate new enterprises,” she says. “Lucy Kirby, who heads that, is a fantastic female role model. “We also have Women in Public Life, which is another body established to encourage women to take up higher profile roles and to mentor them through that process,” Dorey adds. “This is led by Shelaine Green, who also founded a network to encourage more women to apply to be deputies – the politicians in Guernsey – in a bid to ensure that we have a representative group of women running the island. Historically it’s been a bit male-oriented here. “There are definitely steps being taken in the right direction, but it needs to continue. We need to recognise that having a really diverse group of people in the

workplace and in government will help secure any country’s future.” Finally, and crucially, what can women do to help themselves? “Build relationships with funders and bankers before you need them,” says Saunders. “There is nothing more challenging than seeking one out when you’re desperate. It doesn’t build trust with them and it’s very stressful. “I’d also strongly advise getting into communities with one another. It’s far easier to be an entrepreneur in a pack than isolated and alone, thinking you have to do everything yourself. “Find a support group or network and ask for help from those who are just a bit ahead of you – and share what you learned for the benefit of others.” Culverwell agrees: “You need to surround yourself with people who are supportive, but you also need to be willing to be supported and open to help.” This, she says, is not a sign of weakness but of strength and intelligence. n

1 2 UBS: Innovations in Gender-Smart Investing, February 2021 3 Boston Consulting Group: Why Women-Owned Startups Are a Better Bet – 4 5

38 City edition 2021

Advertising feature

Is now a good time to invest? and what should I invest in? Dr James Cooke, Director of Investments and Head of Global Equities for Ashburton Investments (International), explores whether the time is right to invest Written in June 2021 UK PRIME MINISTER Boris Johnson’s announcement in June that coronavirus restrictions would be kept in place in England for another four weeks signalled that the UK was not yet out of the woods. Despite this, the vaccination programme in the UK has been going well, and Public Health England reported positive data on the effectiveness of the vaccine. Meanwhile, a number of stock market indices are now well above pre-pandemic levels. The FTSE All-World Index reached a fresh all-time high in mid-June. In fact, there are many reasons to feel hopeful about the stock market in 2021: • The continuation of the successful vaccination roll-out, leading to an increase in movement, trade and spending • More closed industries reopening – travel and entertainment, for example • The tech, e-commerce and biotech sectors continuing to grow • Low interest rates encouraging people to spend or invest. While we can’t accurately predict the future, we can evaluate the factors that influence the stock market and invest wisely. One way to do this could be by investing in mega-cap high-quality stocks that have industry-leading positions across multiple attractive sectors. Over time, these can deliver sustainable above-average returns through the strength of their market position in an attractive industry.

WHAT ARE MEGA-CAP COMPANIES? Mega-cap companies are generally thought of as those whose total value of

all shares in issue is above $100bn. Most mega-cap companies share some desirable characteristics. To become gigantic, companies generally need to have had something special. Whether or not this something special will continue, is key to determining which mega-cap firms may make good long-term investments.

WHAT ARE THE SHARED DESIRABLE CHARACTERISTICS OF MEGA CAP COMPANIES? Diversification: Gigantic companies are generally much more diversified than smaller companies. Their businesses typically span geographic regions and have multiple products. At some stage, all businesses experience disruption. Being well diversified means that difficulties in any region, or with particular products, does not cause critical damage to an organisation. Predictability: This diversification helps to make the profits from mega-cap companies more predictable. Much modern finance theory encourages big institutional investors to value such certainty more highly. Economies of scale: Mega-cap companies typically have substantial economies of scale. From a financing perspective, rating agencies typically provide higher ratings for mega-cap companies, enabling them to borrow for less. Size also confers operational advantages. Payment network operators

Visa and Mastercard, for instance, are much bigger and more efficient than their peers. This enables some mega-cap companies to provide lower cost solutions than others. People: Mega-cap companies have the ability to attract and retain talent from smaller organisations, or simply to acquire them. Liquidity: Shares in mega-cap companies are typically highly liquid. People and institutions regularly trade in these stocks. This results in lower transaction costs as the spread between bid and ask price is low, and enables positions to be bought or sold more easily than smaller companies. In ‘risk-off’ environments, the relatively lower liquidity in smaller capitalisation stocks can mean that share prices fall more dramatically than they do for larger companies when there are more natural buyers of shares. We can’t time the market. However, we think that there are exciting opportunities to invest in global companies over a longterm time horizon. n


For more information on the Ashburton Global Leaders Equity Fund* and Portfolio* that invests in mega cap stocks and aims to deliver sleep at night security visit: global-leaders-equity

*Not all products and services described in this document are available in all jurisdictions and some are available on a limited basis only due to local regulatory and legal requirements. The material contained herein is not intended for use by persons located in or resident in jurisdictions that restrict its distribution. Persons accessing this document are required to inform themselves about and observe any relevant restrictions. The value of investments and the income from them can go down as well as up, is not guaranteed, and you may not recover the amount of your original investment. Past performance is not necessarily a guide to future performance. Where an investment involves exposure to a currency other than that in which it is denominated, changes in rates of exchange may cause the value of the investment to go up or down. This document is for information purposes only and does not constitute advice in respect of any financial, investment, trading, tax, legal, accounting, retirement, actuarial or other professional advice or service whatsoever. Prospective Investors should inform themselves and if need be take appropriate advice regarding applicable legal, taxation and exchange control regulations in countries of their citizenship, residence or domicile, which may be relevant to the acquisition, holding, transfer, redemption or disposal of any investments stated herein. Ashburton will not be liable for any loss caused by reliance on any opinion or statement made in this document. This document does not constitute an offer or solicitation to any person in any jurisdiction in which Ashburton Investments is not authorised or permitted to communicate with potential investors, or to anyone who would be an unlawful recipient, and is only intended for use by original recipients and addressees. Ashburton Investments believes that the information contained herein is from reliable sources but does not make any representations nor give any warranties or guarantee as to the correctness, accuracy or completeness. Any forecast, projection or target where provided is indicative only and is not guaranteed in any way. Ashburton Investments accepts no liability for any failure to meet such forecast, projection or target. The views and opinions expressed in this document represent those of Ashburton Investments’ investment team as at the date of publication and may be subject to change, without notice, due to altering external factors and market conditions.

city edition 2021 39

Private equity and venture capital

Building on PE and VC success Private equity and venture capital activity has surged during the pandemic – But what’s driving the rise in appetite for PE and VC? and will their purple patches continue into the ‘new normal’?

Words: David Craik PRIVATE EQUITY AND venture capital investment has been one of the clear winners of the pandemic. Despite a difficult first and second quarter of last year – as PE managers, investors and businesses paused their activity amid the uncertainty of the economic lockdowns – a third and fourth quarter revival more than made up for the early shortfall. According to White & Case, global annual deal value in 2020 climbed 5% year-on-year to $555.1bn, despite deal volumes dropping 18%.

40 City edition 2021

Activity has accelerated in the first quarter of 2021 too, with the value of PE deals doubling year-on-year to $360.3bn and volumes up 28%. Venture capital broke records, according to figures from Preqin, with a total of $297bn invested and $391bn realised through exits in 2020. Notable deals hitting the headlines included Blackstone buying a majority stake in genetic testing services group for $4.7bn, and Thoma Bravo’s $12.3bn purchase of cloud security firm Proofpoint. In the UK, according to research from Refinitiv, there have been 345 PE bids for UK companies already this year, the highest since records began in 1984.

Car breakdown firm the AA was taken over by Towerbrook Capital for £219m earlier this year, and supermarket group Morrisons finally accepted a £6.3bn takeover bid by US investment group Fortress in July, after rejecting a £5.5bn proposal from Clayton Dubilier & Rice. VC exits included the direct listing of cryptocurrency exchange platform Coinbase Global, which sold $43.8bn in public equity shares last April.

TURNING NEGATIVE INTO POSITIVE “The pandemic has clearly been a negative event, but it’s created a positive for PE and VC in terms of investment opportunities,” says Alex Smyth, Director at Oakbridge Fund Services (Jersey). “They are either

Private equity and venture capital

allocations from institutional and private investors, as well as family offices, that are tired of record-low interest rates making investments such as bonds less attractive. According to Preqin, global assets under management in private equity rose 6.1% to $4.74trn in June 2020. It expects this number to hit $9.11trn by 2025, with family office demand leading the way. “We have seen a number of institutional investors backing some of the first-time fund managers as their cornerstone investors for niche fund strategies,” says Smyth. “It also has a theme of ‘business as usual’ for them, as they need to continue to find ways of allocating their capital. “With interest rate rises pushed even further into the future, investors will

We’ve seen larger, more established fund managers speeding up the launch of their next fund ▼

buying at discounted prices firms that haven’t done so well in the pandemic or exiting firms in sectors that have flourished, such as in digital technology, communication platforms and healthcare. “And we’ve seen larger, more established fund managers speeding up the launch of their next fund to take advantage.” Nick Stevens, Partner in the Private Equity Group at KPMG in the Crown Dependencies, agrees that ‘smart’ PE managers have benefited from sectors that have done well in lockdown, such as media streaming and online retail. “Portfolio diversification has really come into its own,” he says. Meanwhile, acquisitions have been underpinned by increased capital

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We make it our business to know your business We understand the opportunities and challenges for Jersey businesses in today’s fast-moving world. Our corporate team are locally focussed, commercially aware and provide clear, pragmatic and top quality legal advice in a friendly and cost-effective manner. If you have any questions on how we can support your business, please get in touch.

+44 (0)1534 632255 |

Corporate Law

Private equity and venture capital Morrisons supermarket group accepted a £6.3bn takeover bid in July

Stevens adds that, even before the pandemic, the alternative asset sector was growing strongly because of those returns and favourable demographics. “There is an ageing population and pension pots are growing larger,” he says. “Covid-19 has been the perfect storm for PE and VC. “We had the immediate monetary economic response, where governments ensured that interest rates were as low as possible, meaning assets that paid an interest base yield were not attractive.” However, there have been challenges for investors and fund managers in the PE and VC sectors, particularly around valuations. “Sky-high asset prices are by far the biggest challenge facing PE investors,” says Smyth. Indeed, according to Preqin’s survey, amid heavy competition and a flood of investment capital – both debt and equity – buyout multiples averaged 11.4 times earnings before EBITDA across the US as of year-end, and a record 12.6 times across Europe. Richard Hansford, Director, Alternative Investments, at Ocorian, says this has a lot to do with supply and demand. “The bigger players have raised record amounts of capital, and investors want them to use that cash,” he says. “They are all chasing the same assets, driving up the multiples.” As such, Hansford has seen a number of PE firms pulling away from deals because they are just too expensive. “They are sitting on cash and trying to find value in the market,” he explains. “Some are changing strategies and looking at different types of asset class. “Maybe before the pandemic they had a pure tech focus, for example, which has now filtered down into specific routes, such as insurtech or biotech.” Stevens agrees that valuations at the moment are unprecedently high, but adds that market participants are willing to bid up if they want a company that has done well in lockdown.

There’s an ageing population and pension pots are growing. Covid-19 has been the perfect storm for PE and VC

He points out that PE firms are increasingly changing the way they source assets to cope. “You don’t want to go into investment bank-led auction processes. That’s where assets bid up to crazy multiples,” he says. “They are looking at striking bilateral deals with sellers in private.” Not all valuations are frothy, however. Morrisons’ share price, for example, looks cheap – and therefore attractive to PE – as, despite high sales in the pandemic, it has seen costs such as staff wages and online deliveries rise. It is therefore harder for PE firms to work out the correct valuation for a target, or indeed their own holdings, if they have had a strong or even-less-than-stellar pandemic. It may mean taking on more debt to land an acquisition – which is possible now with low interest rates but a challenge if the rates do rise to combat inflation in the economic recovery.

All of this has meant making strategic changes, including introducing slightly longer exit horizons as they shore up investee companies. “Take a furniture shop,” says Smyth. “Before the pandemic, everything may have been working well, with people coming in to view products. But in lockdown, if that furniture shop wasn’t online, it was in trouble. “It meant PE and VC firms working with clients on new strategies, such as going online and introducing ecommerce.”

CHANGE OF FOCUS Stevens says fund administrators and advisers have helped in this endeavour. “We have a number of London-based managers domiciling funds here in Jersey. There’s been a lot of close working with service providers, administrators and boards looking at the balance sheets of investee businesses and making sure they are not going to collapse,” he explains. “I saw PE managers very quickly

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McLaughlin /

continue to be attracted by expectations of high returns. Over a 10-year horizon as of June 2020, buyout has an annualised net internal rate of return of 15.1%, while growth has 17.5% and VC 12.4%.”

Private equity and venture capital

changing focus – away from traditional investing to looking at processes such as renegotiating terms with lenders and suppliers. You have to roll up your sleeves, create value and get the company ready for sale at a sufficient level of return for the fund.” The Channel Islands is playing an increasingly crucial role in the development of PE and VC. According to the Jersey Financial Services Commission, PE and VC funds under administration grew 21% year-on-year in 2020 to £164.6bn. In addition, almost 100 new Jersey Private Funds were registered, bringing the total to more than 400, most of which are Jersey-domiciled structures. “We are seeing a lot of enquiries – from first-time fund managers, including family office set-ups, to spin-outs from established firms looking to set up in Jersey,” says Smyth. “Part of that demand is Brexitdriven – managers are looking to market to the EU through the National Private Placement Regimes.” Hansford sees the Channel Islands as a PE and VC hotspot because it is a “very cost-conscious, pragmatic jurisdiction when it comes to setting up fund structures”. “Our legal set-up, tax advice and regulations make it a favourable regime – we’re picking up decent deal flow,” he adds. Adding further to the islands’ attractiveness is its use of technology. “The pandemic has taught us a lot about being flexible,” Smyth explains. “We are almost entirely cloud-based in our IT applications, and we are looking at other cloud tech services that are not the norm for the industry. For some PE clients, it is a big tick.” Hansford says we are now in a virtual world of investing. “A lot of investors like to meet a new PE firm, go to presentations and understand the structure and strategy,” he says. “The lack of that during the pandemic has been a barrier for some in our sector, but those who have adopted virtual processes have been more successful. Our clients and investors are demanding smarter tech. They want more frequent information.”

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There’s a lot of dry powder capital. ESG is massive and we will see more activity in that space

So, what can we expect in PE and VC circles in the months ahead? “The third and fourth quarter will be very busy with next generation funds as well as new fund managers launching and raising money,” says Smyth. “There is a lot of dry powder capital and opportunities. ESG is massive and we will see more activity in that space – we are looking at helping an ESG sustainable agricultural fund at present.”

Hansford expects a cooling-off period in terms of deals, given how expensive the market is. “We’ll see a moment of reflection, but if you’re an investor, where else are you going to put your capital?” Indeed, Preqin says 44% of investors are looking to commit more money over the next 12 months, compared with 36% for venture capital. “VC has become more relevant as a result of Covid,” says Stevens. “This is because the technology and pharmaceutical sectors have surged, and they have traditionally been very relevant sectors to VC managers. “They need early-stage capital to develop these ideas and grow rapidly. But I continue to see rich opportunities for PE as well. It is an increasingly attractive asset class post-pandemic.” n

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Alternative Digital Banking Warren Sanders, Director of EWG, a specialist alternative banking provider to the corporate service and fund sectors, on driving efficiencies and client service standards ALTERNATIVE DIGITAL BANKING is not a new phenomenon – we have been offering a highly sophisticated, intuitive solution to our clients for more than a decade. What continues to grow at pace is the appetite that professional services businesses have for embracing this technology for themselves and on behalf of their clients through our client app or via our API. In 2020, the Jersey Financial Services Commission reported a 24% increase in the number of fintech enquiries, with a considerable increase in the number of companies engaging with the regulator about alternative digital banking provision. The PwC report Financial Services Technology 2020 and Beyond: Embracing Disruption sets out the dramatic impact technology has had, and continues to have, on the financial services sector. The report references how “fintech will drive the new business model” and how the “digital wallet becomes mainstream”. The digital wallet concept is not a retail-only solution – it is also the key to delivering the most effective and efficient alternative digital banking provision to the professional services sector. So, what is alternative digital banking? What are the benefits? And why are professional services and fund sector businesses embracing it? Alternative digital banking is revolutionising banking for the better. Alternative banking means we don’t use traditional private commercial and investment banks. Digital banking simply means we are fully online. It provides an innovative and cost-effective digital alternative to the traditional banking system, offering international payment solutions and currency management services. It drives efficiencies, both in terms of cost and time, and drives up standards of service. It offers clients competitive fees, a fast onboarding service and an easy-touse digital platform that can integrate with in-house systems. Increasingly, we are seeing new clients looking to plug an alternative digital banking solution into their matrix of banking providers, embracing the benefits that these relationships bring.

So, what are these benefits? It’s cost-effective: We work in a new way, which means we are able to work very efficiently. This means our fees are competitive and, in turn, the easy-touse online banking platform helps our clients work more efficiently too. Fast onboarding: Believe it or not, we can onboard a new client in 24 hours – enabling transactions to take place as soon as they are required. EWG is regulated by the JFSC and follows a rigorous compliance and KYC onboarding process. Simple integration: Our platform integrates into existing in-house systems, via our market-leading API, which means getting started has never been easier. One log-in, multiple accounts: The unique and intuitive EWG platform is simple to use and enables clients to manage multiple accounts using one log-in – which creates cost savings and time efficiencies. Faster reporting: The EWG online banking platform makes client reporting much faster and more efficient. With one login, you can navigate easily between clients, creating reports as needed. It’s personal: You will still enjoy the very best client service, with real people, and you can engage with us online immediately rather than booking an appointment at some point in the future. By concentrating on our client and product, our experts are always available to help – and provide a personal, bespoke service. It’s still bespoke: Being alternative, being digital, does not mean we can’t tailor our approach and services. We specialise in offering bespoke banking solutions that are tailored to meet the needs of clients in the professional corporate services and funds sectors. Each client enjoys their unique ‘own named’ single multi-currency IBAN.

EWG Founding Directors Leigh Martin, Warren Sanders and Alan Yates

Security: Top technology ensures everything is tracked and recorded. EWG follows rigorous compliance processes and is regulated by the JFSC under the Financial Services (Jersey) Law 1998. The EWG platform is authorised by the FCA under the Electronic Money Regulations 2011 and the Payment Services Regulations for issuing of electronic money and the provision of payment services. It’s not one or the other: We sit alongside other core banking partners but as an innovative, easy-to-onboard and simple-to-use alternative, that adds significant value in terms of cost-reduction, efficiency and enhanced client service. We believe an alternative digital banking provider should listen to its clients and continually tailor its offering to deliver best-in-class service. By listening, we have developed a solution that facilitates the transfer of payments to more than 212 countries, the ability to manage money in more than 38 currencies, deliver more than 85% of payments in less than one hour and onboard clients in less than 24 hours, processing in excess of £5bn of transactions to date. Alternative digital banking is a core component of the continuing need for businesses to embrace technology. We deliver cost savings and delight the end user experience. n


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Investment vehicles

SPAC to the future

Special purpose acquisition companies – SPACs – are all the rage, last year accounting for more than half of all US IPO s . So why the sudden surge in activity? Words: David Burrows


companies (SPACs) allow investors to pool resources in a public investment vehicle with the intent to acquire existing businesses. And they are clearly attracting a great deal of interest right now: in the US, SPACs represented about 60% of all IPOs in 2020. But SPACs are nothing new; they’ve existed on public markets for decades. So why have they recently become one of the hottest market trends in the private equity space? Chris Anderson, Partner at Carey Olsen, highlights several reasons. “First of all, there is a huge demand for attractive investment vehicles, given that interest rates are low and fixed income is offering little in the way of returns,” he says. Another reason, according to Anderson, is the fact that in the early part of last year, Covid-19 meant investors were sitting on their hands. But since then, they’ve been busy putting their capital to work. SPACs are certainly on the rise. Globally, they raised nearly $100bn from IPOs in the first quarter of 2021, surpassing the whole of 2020 in those three months, according to financial data provider Refinitiv. As Anderson explains, SPACs provide a good way of exiting private equity. And

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they have, to a degree, taken over the IPO space, not because they are cheaper but because they are a quicker and simpler way to a listing. With M&A activity also buoyant right now, SPACs are well designed to take advantage of opportunities. Trends that start in the US often make their way to Europe. So does that mean the SPACs frenzy is heading to Europe, particularly as European stock exchanges adjust their listing rules to be more SPAC-friendly? Simon Gordon, Senior Director at JTC Group, points out that SPACs have historically been promoted by US investors but, to a large extent, the market there has become super-saturated, making it harder to get value out of US target companies. The result, he adds, is that SPAC promoters are looking towards Europe, and especially the tech sector. “There are lots of good-value assets of this type in Europe and good potential for decent returns,” says Gordon. “In addition, there are high-quality institutional investors in Europe.” What SPAC promoters have been looking for is a stock exchange that’s familiar to US SPAC promoters, he adds,

and Euronext Amsterdam fits the bill well. Mirek Gruna, Chief Commercial Officer at IQ-EQ in Jersey, agrees that Europe is well placed for an increase in SPACs, albeit from a relatively low base. “We have not seen much SPACs business in Europe so far,” he says, “and what we have seen has been predominantly via Euronext in Amsterdam.” London may soon be in a more favourable position to attract SPACs promoters, he adds, with the Financial Conduct Authority (FCA) looking to change the rules on the London Stock Exchange to enable it to be more competitive in the SPACs market.

LONDON OPPORTUNITY The rule that has impeded London’s development as a SPACs centre is that a SPAC listing will be suspended when it identifies a potential acquisition target – in order to protect investors. However, many investors have argued that such suspensions have had the opposite impact to protecting them, instead depriving them of the chance to sell their shares at an opportune time. There is no such suspension rule in the US – and Amsterdam is more in line with the US than the UK on this.

Investment vehicles

The proposed changes from the FCA – currently under consultation – would no longer require suspension, although the new rules are likely only to apply to SPACs that raise in excess of £200m. However, if the changes proposed by the FCA are implemented, how significant would they be? And what would they mean for the Channel Islands as well as London? Gordon suggests it could be difficult to persuade SPAC promoters to buy into the £200m stipulation. But he believes that if the rule changes go ahead, the LSE will undoubtedly be more competitive, especially given the big institutional investors based in London and the huge expertise there in relation to private equity-style acquisitions.

Gavin Wilkins, Chief Commercial Officer at Hawksford, certainly believes that changes to SPAC regulations in London could continue to ignite interest from new regions. “Investors are keen to access opportunities in international growth markets, including those in Asia and the Middle East,” he says. “Measured changes that facilitate this and ultimately help emerging international


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Investment vehicles companies to access London markets should, of course, be welcomed.” To get the full picture, however, he says, these should be viewed in tandem with domestic developments in those regions, including changes to local foreign ownership restrictions, changes to domestic securities laws to enable overseas capital raising – for example, in Vietnam – and the ongoing evolution of the UK’s post-Brexit international trade arrangements. “The UK has also made no secret of its desire to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),” Wilkins says. “All of these factors contribute to interest in and from the Middle East, Asia and other key regions, with SPACs being a potential ‘go-to tool’ to facilitate that.”

COMPETING EXCHANGES? In terms of vying for SPACs business in Europe, Gruna at IQ-EQ accepts that it may be that London takes some business away from Amsterdam. But he suspects the exchanges will complement one another rather than be competitive – especially following Brexit. “The SPACs frenzy has now moved to Europe as European stock exchanges adjust their listing rules to be more SPACfriendly,” he says. “For instance, the UK Listings Review, published in March 2021, recommends liberalising the rules for UKlisted SPACs and safeguarding investors.” He is upbeat about the prospects for the Channel Islands, too. “I would hope the rule changes to LSE listings would be good for Jersey,” he says. “The island is certainly tried and tested when it comes to LSE and AIM listings. There is good regulation in Jersey, its legal system is highly respected, and its proximity to London is an advantage.” He adds: “Jersey companies listed in the UK will be subject to the Takeover Code, which will also be attractive to investors. The code provides greater scrutiny on governance and reporting, which boosts credibility and essentially provides a stamp of approval. “The flexibility of Jersey companies, combined with the advantage of listing on the buoyant LSE, can be the ideal route for SPAC sponsors willing to raise money in Europe.” Whenever we see a major surge in activity in a certain area, the inevitable question is whether we are witnessing a bubble. So does the SPAC frenzy represent a herd mentality from investors that are desperate to enhance returns but are in some instances unfamiliar to this market? “It’s too early in the cycle to say,” says Gruna.

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“If there is a degree of following the herd, this is where regulation in jurisdictions comes in to protect investors. You are not going to have a universal regulation but you could have a concerted effort from all quarters explaining to investors what they are getting themselves into.” Anderson from Carey Olsen says there are critics about the rise of SPACs, not least because the trend means retail investors are getting in on the party. “While these investors may be from the ultra-high-networth space, they are still individuals and there are concerns about this,” he says. Wilkins points out that, while SPACs should largely be viewed as a good thing – easing access to opportunities and capital – detractors have questioned whether they pose additional risks and whether less suitable companies could use them to find their way into public markets. “In the case of a single-deal SPAC, there are circumstances in US markets where a target company may not be subject to the same level of regulatory scrutiny as it would if it were going for an IPO in its own right,” he explains. “In the UK, it’s more likely that deal would be viewed as an RTO and the admission rules applicable to the target

SPACs have taken over the IPO space because they are a quicker way to a listing

Case study: Guernsey joins the party Carey Olsen recently advised Genius Sports on its public listing on the New York Stock Exchange following its successful business combination with dMY Technology Group II, an NYSE-listed special purpose acquisition company. The deal represented the first NYSElisted SPAC transaction to involve a Guernsey company. With more than $145m in cash and no financial debt on the balance sheet, Genius Sports is expected to continue to capitalise on the considerable growth expected in the global online sports betting market. Commenting on the business combination and listing, Carey Olsen’s Chris Anderson says: “The driving factor behind this was the provision of new capital and the ability to expand into new markets. Genius Sports has significant tie-ups with the National Football League and the US listing helped here.”

would be the same as those for an IPO.” Wilkins accepts there have been failures in the past that have led to accusations of aggressive financial engineering, but there have been many success stories. “While there is always an element of caveat emptor in an open market, I think one should remain cognitive of the differences between a SPAC and an IPO and pay due regard to the strength and track record of the management team that has been assembled.”

CHANGE IN ECONOMIC ENVIRONMENT Whether a bubble is about to burst or not, Anderson believes the SPACs market may have peaked. But that doesn’t mean there will necessarily be a marked slowdown any time soon, he adds, or that the LSE has in any way missed the boat in taking a significant slice of SPAC business. Wilkins takes a similar line. “While I gave up trying to predict the future a long time ago, there is still a lot of dry powder in the market and a lot to unwind, with speculation around future inflation and interest rates. “Will companies still be queuing up to come to market a few years down the line? Who knows? But right now, with so many deals in the pipeline and deep pools of capital across the UK and Europe, it’s likely that the SPAC attack has a few more miles to run. n

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Capital Markets Confidence Natalie Finlayson, Advisory Senior Manager, KPMG in the Crown Dependencies, examines some of the hot topics following a landmark period for capital markets THE PAST 18 months have brought about radical change and unexpected trends in the world of finance. This is certainly true of public markets and equity financing, which have thrived since reopening in October last year. While the US IPO market has grabbed the headlines, the London Stock Exchange is on track for a strong year for investment funds, with a record half year of investment companies issuance totalling £6.7bn, up 123% from H1 2020. At KPMG, we have recently been engaged on a variety of transactions, including IPOs, secondary issuances, rollovers and step-up migrations. Secondary issuances have dominated, representing 84% of total issuance. We have provided reporting accountant services to a number of existing clients, as well as various new entrants to the market.

THE RISE OF SPAC s Special purpose acquisition companies (SPACs) in particular have seen a dramatic resurgence through the Covid-19 pandemic, which has brought about new challenges to regulators and investors alike. SPACs raised a record $76.2bn in 2020 and by 30 April 2021, there were 427 SPACs looking for targets, up from 224 in January. While much of the SPAC activity has been in the US, appetite for SPACs in Europe is increasing given their capacity to get companies to public markets faster than traditional IPOs. While there has been much fanfare around SPACs, they have their fair share of critics. The treatment of warrants has been a particularly hot topic, with the latest SEC guidance suggesting that these should largely be treated as debt, rather than equity. This has a knock-on effect for the new company’s capitalisation and indebtedness information, needing to show information at incorporation as well as at settlement. At KPMG, we have seen a significant uptick in interest in listing in European markets. While the UK SPAC market

has been quiet in recent years, there is anticipation in the market that this could soon change due to amendments to the Listing Rules.

location for US investment funds as a result of its flexible company law, which allows US GAAP reporting.



In March this year, Lord Hill’s review of the Listing Rules was published, proposing a raft of recommendations to make London a more attractive public market. Included within the review’s recommendations was allowing companies with dual class share structures to list on the premium listing segment on a conditional basis, which would allow founders to take companies public without significantly diluting their ownership/voting rights. Previously, the prohibition of dual class shares on the premium segment has forced companies to take the standard listing (chapter 14) route, a recent example being The Hut Group. Lord Hill’s review also seeks to resolve the issue around the current suspension of trading period when a SPAC announces a potential acquisition, a measure initially introduced to protect investors. In practice, many fear it may harm investors, denying them the opportunity to divest.

JURISDICTIONAL CHOICE FOR LISTED INVESTMENT FUNDS KPMG works across multiple jurisdictions for investment fund listings, with Guernsey and the UK being the most prominent for London Stock Exchange listings. The Guernsey market has remained strong throughout the pandemic, retaining its position as one of the primary domiciles for alternative investment funds, ranking second behind only the UK for both number of investment fund issuances and raise proceeds. The year 2021 has already seen more Guernsey-based London Stock Exchange IPOs (two) than last year (one), while there have already been nine further issuances, just three fewer than in 2020. Guernsey has emerged as a particularly attractive

Some key considerations to think about when undertaking a primary or secondary issuance include: • Timings Both primary and secondary issuances can be lengthy processes; it is essential to start preparations and get a strong working group of third parties engaged early on who are experienced to guide you through the process. • Facility renewal It is important to consider whether any debt facilities expire over the working capital period as this may impact the directors’ ability to make a working capital statement. • Investor base consideration International offerings that include the US can be more of a regulatory challenge and can require more time. • Governance codes A decision needs to be made whether to follow the AIC corporate governance code or the full UK corporate governance code. • Seed portfolio Consideration must be given to whether a seed portfolio will be beneficial depending on the investment strategy and needs of the investors. n


KPMG in the Crown Dependencies acts as an investment funds centre of excellence working on UK, Guernsey and Jersey investment fund transactions across multiple sectors. We would love to hear from you and assist you with your listing journey. If you have any questions or would like more information, please email Natalie Finlayson at

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Passion investing

Scrapheap challenge

some believe the emerging trend towards ESG principles could threaten the existence of the classic car market, but it’s far from ready for the scrapheap. In fact, green issues could even fuel further growth

Words: Richard Aucock

INVESTING IN CLASSIC cars is big business. Annual turnover of the sector stands at £18.3bn, the recently formed Historic & Classic Vehicles Alliance (HCVA) has calculated, while the UK’s classic and historic vehicle fleet is estimated to be worth £12.6bn – and growing. The sector is also diversifying, with values for 1980s and 1990s retro classics now surging alongside more established models such as Ferraris and Aston Martins. Six-figure Ford Sierra RS Cosworths are becoming a regular occurrence, while a pristine Peugeot 205 GTI can command £40,000 or more. Wealthy individuals are seeking out the cars they grew up with – and are not afraid to spend what it takes. However, as the new car sector closes in on the phase-out of petrol and diesel cars from 2030 – in favour of zero-emission electric cars – there’s a risk that attention will turn to the perceived environmental impact of the classic car sector. How does it equate to the emerging trend for environmental, social and corporate governance (ESG) principles?

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Alexander Kirch, Maxim Gorishniak, Dmytro Surkov /

Passion investing

It’s an issue about which James Haithwaite, Luxury Asset Specialist at Jersey investor services firm (and ESG specialist) IQ-EQ, is acutely conscious. “Growing ESG awareness, and the shift towards electric vehicles, is certainly likely to shake up the UK motoring industry as a whole,” he explains. Nonetheless, he argues, classic cars will not be affected by this as severely as some suggest. “Classic cars are a unique investment, and are likely to continue to be treated as such. They are a passion purchase: the community, culture and many events surrounding classic cars are all a part of the joy of owning one. Interest is unlikely to fade any time soon.” In terms of sheer numbers, it is a huge industry. There are around 700,000 owners of classic cars in the UK, with 1.54 million historic vehicles aged 30-plus years, and a further 1.47 million classic vehicles aged 15-30 years. The recent Goodwood Festival of Speed is evidence of this. Unable to be held in 2020 due to the pandemic, its status for 2021 looked uncertain – until the government confirmed it would form part of the Event Research Programme (ERP) as a pilot event. This is the same status as the Wimbledon Championships and the 149th Open at Royal St George’s,

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Passion investing

THE ECONOMIC IMPACT Annual turnover of the whole sector

Estimated value of the UK’s classic and historic vehicle fleet

Annual tax revenue generated by the sector


Value of classic and historic vehicle sales in 2019

Value of classic and historic car sales in 2019

Classic vehicle owner insurance spend in 2019

underlining the importance placed on the industry’s economic power by the government. Almost 50,000 people attended Goodwood each day, generating millions in turnover. A further half-amillion subscribers were able to access a livestream of the four-day event.

ENVIRONMENTAL AWARENESS That’s not to say investors are unaware of potential ESG impacts on the sector. Haithwaite has identified a number of trends pointing to greater awareness. “One of the obvious ones is the limiting of driving of the classic cars to just occasional ‘joy rides’ or journeys to and from car shows. This is underlined by the fact that classic car insurance policies typically have limits for yearly mileage.” The HCVA estimates that the annual mileage of a classic vehicle is just 1,200 miles – significantly lower than the 7,200 miles of the average UK motorist. Each year, classic cars make, on average, just 16 trips. This helps restrict annual CO2 emissions generated by the use of a classic car to 563kg – that’s one-sixth of the emissions of the average modern petrol or diesel car, Haithwaite points out. By contrast, mobile phone use generates 1,250kg of CO2 per annum – more than 70% more. And using a computer creates 1,400kg of CO2, 85% greater than driving a classic car. As for the risk of restrictions to classic car use in cities, the government is expected to consider vehicles more than 40 years old as historic, meaning they can continue to be used even in Clean Air Zones and UltraLow Emission Zones. Haithwaite does not think the emerging trend of converting classic cars to electric will have a significant impact on the marketplace in the foreseeable future.

Classic cars are a unique investment, and are likely to continue to be treated as such. They are a passion purchase

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Passion investing

WHAT IS THE HISTORIC AND CLASSIC VEHICLES ALLIANCE? “While notable, the process of converting a classic car to electric remains extremely costly, so until technology advances to make it more affordable, we’re unlikely to see a significant impact any time soon.” He also sounds a note of caution to investors regarding valuations here. “While often a passion purchase, classic cars are also generally seen as a long-term investment, increasing in value over time. Converting classic cars to electric has the potential to decrease the value of the car, which may be off-putting to collectors. “The value of classic cars is attributable to five key factors – provenance, rarity, usability, desirability and originality. Converting classics to an EV will have a detrimental effect on most of these.” Those looking to reflect ESG principals by converting their classic into a zeroemissions vehicle may thus find the significant cost of the conversion has an unwelcome impact on their investment. According to Haithwaite, investors are being sensible. “The prevalent view seems to remain that while classic car investors are becoming more cognisant of the environmental impacts of the car industry at large, the classic car sector is a very small contributor when it comes to greenhouse emissions.”

SOCIAL SIDE In terms of social concerns, the classic car industry already performs well, according to Haithwaite. “The spending of classic car investors on related services such

as car restoration is quite a substantial contributor to the UK economy,” he says, adding that focusing on the ‘S’ in ESG will help demonstrate the positives of the classic car industry in fostering skills and ensuring decades-long crafts don’t die out. “The car restoration sector is very niche and prone to cyclical trends in the economy. It is also dependent on how the overall market in classic cars tends to be doing. “It goes without saying that protecting and promoting specialist skills by placing apprenticeships with small providers doesn’t only help smaller and often familyowned businesses, but also allows the car restoration industry to support the classic car enthusiasts and investors.” However, Haithwaite adds, it is unclear if this extends to the government’s levelling-up agenda. “Based on my review of the UK government’s Levelling Up Fund: prospectus, I can’t see how the investment and support of this fund could potentially benefit the car restoration industry and its diversity.” There may exist an opportunity for the sector as a whole to demonstrate otherwise – particularly with 113,000 jobs and 665 apprenticeships dependent on the industry. The HCVA adds that just 5% of the sector’s activity is in London, with particular clusters in the West Midlands, Lancashire, Kent and Sussex. Even the Chair of the Environmental Audit Committee, Philip Dunne MP, has voiced his support, commenting: “The

The HCVA was established in response to “a combination of bureaucracy and poorly focused environmental legislation, which threatens Britain’s world-leading classic vehicle industry”. It aims to educate the public, politicians and regulators on environmental issues, arguing that classic vehicles are “the epitome of sustainability”. Led by Silverstone Auctions classic car specialist Harry Whale and Eagle E-Types founder Henry Pearman, it is open to businesses and individuals from across the sector. It aims to encourage good corporate governance by introducing common standards and a code of conduct that all members sign up to.

historic and classic car sector plays an important role not only in preserving heritage, but also delivering skilled jobs.” The thriving classic car market is not without its challenges as 2030 nears and as ESG principles rise up the agenda for investors. But Haithwaite adds an additional viewpoint that may offer some reassurance as to its future viability. “The ESG-driven ban on new petrol and diesel cars may fuel a surge of consumer interest in classic cars, as petrolheads look to classic cars as an alternative.” Investments in classic cars may yet be poised to grow further by capitalising on the intangible aspects of increasing ESG awareness, rather than being threatened by it. n

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Knowledge Brain food for the busy business professional

The Knowledge is compiled by Alexander Garrett


points The beat goes on

Listening to rap and hip hop music can help people run further as ‘motivational’ lyrics overcome mental fatigue, a study has revealed. In a series of trials at the University of Edinburgh, researchers found that runners who listened to songs from artists including Jay-Z, Kanye West and A$ap Rocky performed better than those who had no music at all. Experts found mental fatigue, which builds during exercise, can be lessened by music as it distracts runners from realising how much effort they are putting in. The study, published in the Journal of Human Sport and Exercise, is the first of its kind to investigate the effect of music playlists on running capacity and performance when mentally fatigued. The researchers conducted two trials to examine how listening to music affected the running performance of 18 fitness enthusiasts.

Bark to work

Success on the side

Our days are numbered

Fear of the dark

The office dog may become an increasingly common feature of working life after the pandemic. A survey of small business leaders showed that having a canine pet is high on many wish lists. The research, among 1,000 small business owners and managers by Hitachi Capital Business Finance, found that 10% would like an office dog so they could continue taking the walks enjoyed during lockdown. A similar number opted for an office games room, creche or laundry room, while a gym or workout space was even more popular. One in five small business leaders plan to phase out having a dress code for their staff, and a similar proportion have vowed to get rid of meeting rooms.

Humans could live to the age of 150, a study by Singapore company Gero has concluded. The team behind the research studied the ‘pace of ageing’ in three large groups across the UK, US and Russia. They assessed changes in blood cell counts and the daily number of steps taken, analysed by age group, in order to examine the rate of incremental decline in the human body. They found that if major causes of death such as cancer, heart disease or traumatic injury were removed from the equation, the natural longevity of their human subjects was between 120 and 150 years. One explanation is that the body’s ability to restore equilibrium after some form of disruption fades with time. The findings were reported in Scientific American.

More than 80% of US online businesses that achieve a six-figure revenue start life as a side-hustle, according to new research. The study by Zhou Ventures found that more than half of the founders of these successful digital ventures are aged 30-39, and the most important reason cited for starting their business is “to have a bigger impact and feel more fulfilled”. The research also discovered that the biggest success factor in developing an online business is being able to deliver a great customer experience. More than 90% of the entrepreneurs surveyed had a college degree, and only 4.2% had borrowed money from a bank to start their business.

You’ve heard of mood lighting; now it appears that lighting levels may actually affect our mood. Scientists at Monash University in Melbourne and Australian Catholic University in Sydney investigated how light affects an area of the brain called the amygdala, which regulates emotional responses. In a study published in the online journal PLOS One, they found that moderate or dim light was more effective in suppressing amygdala activity in a number of human participants than complete darkness. This has been interpreted as explaining why people have a fear of the dark – in the absence of light, their amygdala activity is stimulated, prompting a host of fears and anxieties – while at the same time, mood is elevated by low levels of lighting.

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New in… BOOKS



GO BIG: How to Fix our Worlds by Ed Miliband (Bodley Head, £18.99, hardback) Just as Gordon Brown has his book out on how to sort out the planet (see Guru Watch, p60), another big beast of the UK’s Labour Party has published his thoughts on the subject. Ed tackles some of the same problems – climate change, reining in big tech, affordable housing – but his solutions are less to do with international thinktanks and treaty organisations, and more to do with local solutions that work. He visits a citizens assembly in Mongolia, a cycle network in Manchester and a campaign for the first halal Nando’s in Cardiff. So long as he doesn’t try to eat another bacon sandwich…

If Then: How One Data Company Invented the Future by Jill Lepore (John Murray, £10.99, paperback) This is the story of a real company few people will have heard of, yet pioneered many ideas now associated with the likes of Google, Facebook and Cambridge Analytica. The company is The Simulmatics Corporation, and author Lepore discovered its documents in the archives at MIT. It was founded in 1959 by prominent US social scientists, whose idea was to simulate human behaviour using data to predict the future. They worked for JFK’s election campaign, the New York Times and the US Department of Defense. But though they claimed to have invented the ‘A-Bomb of social science’, it all went pear-shaped amid failed marriages, a suspicious death and alleged war crimes.


paper trail

The Man Who Mistook his Job for his Life by Naomi Shragai (Virgin Digital, £16.99, hardback) How can we disentangle our personal life from work? Business psychotherapist Naomi Shragai’s thesis is that we unconsciously re-enact our personal past in our professional present in a way that often holds us back in the workplace. That could be seen in confusing your boss with your parent; avoiding conflict at work because of squabbles you’ve had with your siblings; or suffering imposter syndrome because of the way success was dealt with in your family. In any of these cases, she argues, we are trapped by our upbringing and the patterns of behaviour we learned while growing up. The first step in breaking this mindset is to understand these connections.

Panic as Man Burns Crumpets: The Vanishing World of the Local Journalist by Roger Lytollis (Robinson, £16.99, hardback) As a memoir of working on local newspapers over the past 25 years, this book deserves attention. Local and provincial newspapers are a wonderful institution now seriously endangered by digital news, citizen journalists and the online migration of advertising. The decline had probably set in well before Lytollis signed on a quarter of a century ago, but he promises a string of engaging stories of the kind that only local newspaper reporting can offer, from being photographed naked, having a dog be sick on your trousers, to interviewing celebrities including John Hurt and Jordan.

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The Knowledge

In numbers: Inflation RESOURCES


UK Consumer Price Index inflation, %, June 2021, the highest for two years Source: Office for National Statistics


UK Centre for Greening Finance & Investment The UK government has set up a research centre in London and Leeds to help private companies consider the climate impact of their investment decisions. Five flagship projects in its first year will focus on topics including extreme weather and property, litigation and environmental damages, and infrastructure, supply chains and systems.

Equivalent rate in Venezuela, %, May 21, currently the world’s highest

Source: Trading Economics

Talking responsibly This podcast on responsible investment was created by pension fund managers David Hickey of Lothian Pension Fund and Adam Matthews of the Church of England Pensions Board. The first episode focuses on the election of Joe Biden and lack of data in responsible investment. And each week there are guests from the likes of Blackrock and the Financial Times.

56.2 207 Annual jump in petrol prices in the US, %, May 2021

Source: Bureau of Labor Statistics

Getting Started Toolkit These online resources from the Business Disability Forum aim to help businesses be more accessible to customers and staff with disabilities. Sponsored by Lloyds Banking Group, the toolkit covers how to meet the needs of the disabled and implement this into policies and practices. Disability affects one in five people in the UK, yet according to ONS data from 2020, only 52.3% were in employment, down from 54.1% the year before.

Daily inflation rate in Hungary, %, August 1945 to July 1946, the highest ever recorded (prices doubled every 15 hours) Source: Investopedia

Midnight Trains A French start-up is to launch a network of sleeper train services across Europe as a greener alternative to air travel. Dubbed ‘a hotel on rails’, services will run from Paris to 24 cities including Rome, Madrid, Berlin and Edinburgh from 2024. Hotel-style rooms will offer privacy and security, with an onboard restaurant and bar. It is backed by French entrepreneurs including Xavier Niel, co-owner of Le Monde newspaper.

$6,679.78 50 years of inflation: what $1,000 in May 1971 would buy you today Source: Bureau of Labor Statistics calculator

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How to…

...Get the office back to work As vaccination continues and life returns to normal, it’s time to consider getting people back to the office, which has probably been sitting almost empty for the past 12 months. But what do you need to do to prepare – to ensure staff are safe and can work effectively in the new normal?

Do a risk assessment According to the UK’s Health and Safety Executive, a Covid-19 risk assessment should identify what work activity or situations might cause transmission of the virus, who could be at risk, and what can be done to control the risk. Create a set of guidelines for working safely that you can share with your staff.

Who’s responsible? Generally speaking, employers are responsible for taking measures within their workplace. The building’s landlord has responsibility for common areas of the building including lifts, the entrance hall and facilities such as bathrooms or restaurants that are shared by more than one company.

“Landlords will need to ensure that lifts are not overcrowded and people do not congregate in lift lobbies or other common parts”

Keep your distance “Landlords will need to ensure that lifts are not overcrowded and people do not congregate in lift lobbies or other common parts,” says law firm Pinsent Masons. As an employer you may decide to spread out desks to create more space between them and put up screens between desks. “Many leases allow internal nonstructural alterations without consent – so alterations such as moving desks further apart or installing

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demountable partitioning in order to create individual spaces may not need [the landlord’s] consent,” the law firm adds.

Stay clean Review your cleaning arrangements and if necessary step up the schedule so that all commonly touched surfaces are sanitised regularly during the day. That includes door handles, handrails and bathroom facilities. Make sure hand sanitiser is available throughout the office. You should also think how the office will be ventilated, as airborne transmission is the main way that infection takes place; consider leaving windows open where possible.

Get testing “There’s no law that says staff must be tested for coronavirus, but some employers might want to bring in testing as part of their workplace policy,” states workplace mediation service ACAS. You should consult with your staff or any representatives, including trade unions, on how testing will be carried out and what happens if individual employees don’t want to be tested. Consider whether you can offer them an alternative arrangement such as continued working from home.

Manage hybrid working Repeated surveys have shown that most office workers would like to continue working from home some of the time – hybrid working. “Employers may consider either adapting or updating an existing flexible working policy to include hybrid working as a specific category, or introducing a specific hybrid working policy,” says the CIPD. Among the many aspects to consider are which

The Knowledge

Business leaders on making it to the top

roles suit hybrid working, how employees can request to work in this way, and how activities such as meetings, training, team communication and technology support will be managed in the hybrid context. You’ll also have to think about timetabling which days different teams and individuals come into the office.

Rethink How well suited are your offices to the new way of working? In future, offices should be designed to strike a balance between openness and privacy, argue AnneLaure Fayard, John Weeks, and Mahwesh Khan in the Harvard Business Review. That means incorporating spaces where social interaction can take place, but also providing spaces where people can put their head down to get on with work or join meetings with those working remotely. Some companies have created ‘Zoom rooms’ specifically to facilitate video meetings, so that you are not distracting the person sitting at the desk next to you.

Make it fun Above all, companies will need to make employees want to come back to the office. Among the most popular workplace offerings among employees are a creche, a games room and an onsite laundry, according to a survey by Hitachi Capital. Think about scheduling drinks and other social activities and even allowing pets in the office. Employees now know they can do their job from home, so to lure them back, you’ll have to make it an enticing prospect.

Getting ahead Jim Coupe Managing Director, Skipton International What was your ambition and how did it shape your career? I read electronics and manufacturing engineering at university, sponsored by a defence communications firm I joined on graduation. That gave me the chance to work on leading edge technology and travel to the Far East and the US. I took an MBA as I realised engineers in the UK seldom reached board level.

Why switch from telecoms to financial services? I was working for Cable & Wireless in Guernsey when my son was born and couldn’t imagine a better place to raise a family. When that job ended, I found an opportunity running the Guernsey operation of a lending business. I joined Skipton International as Commercial Director in 2009. Telecoms and financial services might look different, but both are regulated, customer-focused services. The biggest challenge is assimilating information quickly to add value.

You’ve led Skipton for 10 years – how do you stay motivated? We have a great team, which is very rewarding. As the company has grown, we’ve delivered opportunities. Working on something new always motivates me. I also get a kick out of helping the business grow.

What are you most proud of during that time? Navigating the bank through changes that have resulted in Skipton being the only remaining offshore entity of the UK building society sector; developing our UK lending; and developing Skipton’s ESG.

Community is clearly key to Skipton – what about you? It is a perfect fit with my values. I’m pleased Skipton focuses its efforts on helping good causes with the Skipton Community Fund. Since its inception in 2018, £100,000 donated has made a difference to many people in the Channel Islands. And the annual Skipton Swimarathon is a great event.

How do you unwind outside work? My children appear to consider my main purpose as being their chauffeur! I try to keep fit at the gym and really need to get back into running. My favourite pastime is skiing and I usually try to get a couple of weeks in.

What’s your advice to those starting out? Continually develop; widen your skills and experience to be in the best position to take advantage of opportunities as they appear.

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Gordon Brown


or 10 years two months he was the UK’s Chancellor and global financial instability; the humanitarian crisis and global for two years 10 months Prime Minister. But whereas other poverty; barriers to education and opportunity; and global leaders have become mired in controversy since leaving inequality and tax havens. Each is too big for any nation to solve office, Gordon Brown remains an influential figure. alone, says Brown, but must be tackled by coordinated action. In recent months he’s led calls for wealthy nations to spearhead What marks out Brown from many other progressive leaders is a global vaccination effort, challenged Scottish Nationalists on that he still believes in globalisation. But in Brown’s world it means their independence aspirations, condemned the UK’s squeeze the power of global institutions and action rather than markets of overseas aid, and urged the UK to lead on climate and economic forces. It was he who in 2005 persuaded the change. And he’s been unable to resist suggesting in G7 to write off the debt of the poorest countries in the “Few exthe wake of Greensill that Prime Ministers should be world. In 1998, he used the same forum to argue for politicians can banned from lobbying for five years after quitting. global reform of corporation tax – an initiative that deliver such a Brown has always thought big. In December appears to be coming to fruition. clear vision of 2008, in the wake of the financial crisis, he told It’s been said that Brown’s views are outdated; the what’s needed to the House of Commons: “We not only saved the institutions in which he puts so much faith are largely world…” – a probable slip of the tongue that earned the creation of the post-Second World War order; and fix the world” derision at the time although some, including Nobel he is less sure-footed on cryptocurrencies, cyber crime or Prize-winning economist Paul Krugman, thought he had fake news than he is the writings of Adam Smith. done just that. Now, Brown has come up with a recipe to solve However, few ex-politicians can deliver such a clear vision of the world’s pressing problems. Seven Ways to Change the World what is needed to fix the world; and at a time when the West (Simon & Shuster, £25) identifies major global issues: health; is riddled with self-doubt, Brown’s moral certainty provides a climate change and environmental damage; nuclear proliferation; coherence many find appealing.


Not exactly jargon, but certainly a neologism of the most questionable kind, Abrdn is the utterly unpronounceable new brand name that investment house Standard Life Aberdeen adopted earlier this year. It’s been billed as the most ludicrous renaming since the Post Office changed its name to Consignia – then reversed its decision a year later. Midwife to the genius invention of Abrdn was corporate identity specialist Wolff Olins, whose global principal Charles Wright told The Drum: “Our role has been to help clarify and articulate the strategic platform from which this newly simplified business can grow.” Others put it more bluntly. One critic noted that the name Aberdeen had been “disemvowelled”. Removing the vowels makes the company more in tune with the digital world of fintechs, it has been claimed. Some would say it makes the fund manager sound like an obscure village in Wales. If it is the start of a trend, expect to see Brtshrwys, Glxsmthklne and Brclys in the coming months.

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Upper wear Your outfit for a Zoom call – pyjama bottoms complete the ensemble

Doomscrolling Endlessly browsing social media for bad news stories




The Knowledge


Expect to hear the word gigafactory a lot more in the coming years. Gigafactories make electric vehicle (EV) batteries. The word was coined by Elon Musk after Tesla laid plans for Gigafactory 1 near Reno, Nevada, its first fully fledged battery production facility, which opened in 2016. Constructed and is operated with Panasonic, it provides batteries for most of the company’s EVs, with a reported capacity to power 500,000 cars a year. Musk has said 100 similar factories must be built around the world to transition to sustainable energy consumption. The gigafactory concept has been swiftly embraced by governments eager to ensure their country has a share of this fast-growing industry. In the UK, six companies are reported to be working on plans to build gigafactories: Ford, Nissan, LG, Samsung and British startups Britishvolt and InoBat Auto. Across Europe, 38 are planned, according to green lobby group Transport & Environment. However, T&E says that, for all the hype, Volvo and Volkswagen are the only two major carmakers in Europe on track to switch to electric in line with the EU’s net-zero climate target. Julia Poliscanova, T&E’s Senior Director for Vehicles and Emobility, said: “Carmakers are desperate to show off their green credentials, but most of them are miles away from where they need to be. Even the ambitious lack a suitable strategy to get there.” Stellantis, Daimler, BMW, Jaguar Land Rover and Toyota are among the laggards, with an over-reliance on hybrids. And T&E says Ford has “an ambitious commitment to become fully electric by 2030 but appears to be running out of time”. Britishvolt, established in 2019, is spearheading the UK challenge. In December it selected Blyth in Northumberland as the site of


HOT LET THERE BE LIGHT The Tech Bar Momax IoT Wireless Lamp is a desktop light you can plug into your phone with no cables attached. £129.95

its first gigafactory, in which it will invest £2.6bn. Construction begins this summer, with the first lithium-ion batteries set to roll off production lines by the end of 2023 and the plant producing 300,000 batteries a year by 2027. Nissan has unveiled a £1bn investment in its own gigafactory in Sunderland, which will produce 100,000 batteries initially, with the potential to treble that.

US AMBITIONS The US is also stepping up its ambitions. President Joe Biden has announced plans to accelerate the country’s push into EVs, investing $174bn in production, although there is likely to be pushback from Republican senators representing gas-producing states. S&P Global recently reported: “We forecast US PEV (plug-in electric vehicle) sales to increase from 0.28 million units to 1.05 million units between 2020 and 2025. This is led by the 12 states that have adopted the zero-emissions electric vehicle programme, and from the upside potential of President Joe Biden fulfilling election promises of reaching carbon neutrality by 2035, replacing the government’s fleet with electric vehicles and investing in 500,000 EV charging stations, all of which could increase PEV production and uptake.” S&P forecasts that global lithium-ion battery production capacity will increase from 455GWh in 2020 to 1,447GWh in 2025 – a compound annual growth rate of 26%. It says China and Europe will be the largest contributors to that, with the two regions becoming the biggest drivers of global passenger PEV car sales. For the time being, says S&P, China dominates the market with 77% of lithium-ion capacity. However, with everyone determined to be a winner in the transition to green transport, the race is definitely on.

FOLLOW ME The Belkin magnetic phone mount with face-tracking is a cradle to hold your phone that follows you round the room in Zoom calls or Tik Tok videos. £44.99

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Directory To advertise in the directory in print or online contact Carl Methven on

Unleash the Power of Automations with Agile Automations Agile Automations specialise in developing bespoke Robotic Process Automations (RPA) and Robotic Desktop Automations (RDA), putting automation at the very heart of your organisation’s infrastructure. An organisation – where employees perform predictable, rule lead, highvolume, transactional processes and data manipulation – will boost their capabilities, increase accuracy, save money and time with RPA. Our robotics act with outstanding efficiency and accuracy, 24 hours a day, while offering enhanced Risk & Governance controls, sometimes eliminating the need for human engagement altogether. At Agile Automations, we do not use any robotics platforms, which allows us to offer a complete, yet flexible solution, for our clients; each automation is bespoke, designed to their unique individual requirements, without any need to compromise. This results in an enhanced Return on Investment.

As a full service Jersey law firm, we are best placed to support our clients no matter their personal or business related legal needs. Led by industry recognised litigator, David Benest, our team of expert Jersey lawyers provide our clients with sound, practical and commercial advice you’d expect from larger Jersey law firms, with the personable and responsive agility of a smaller one. Since establishing in 2016, we have worked with a variety of clients ranging from private individuals, large and small local businesses, and government departments. We are known for being an authoritative voice that cuts through complexities to provide accessible advice without the jargon while maintaining our approachability and high standards of service. Our private client team offer expert advice in helping individuals make key decisions when it comes to preserving their wealth now and in the future. We offer a wide range of legal services which include:

To find out how Agile Automations could automate your business, please do not hesitate to contact our CEO Martin Keelagher Email: Website: Twitter: LinkedIn: agile-automations/ Facebook: AgileAutomations/

Deloitte employs over 200 professionals in Jersey and Guernsey and is part of Deloitte North South Europe (NSE). The NSE firm brings together 13 countries and over 40,000 talented people, giving the firm the expertise to solve organisations’ most complex challenges and make an impact that matters. John Clacy Partner, Guernsey D: +44 1481 703 210 Jo Huxtable Partner, Guernsey D: +44 1481 703 308

Dispute resolution Criminal l Business law l Commercial l Commercial property l Employment l Family law l Residential property l Wills and probate

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

For more information on how we can be of service to you, please visit our website or contact us on:

Siobhan Durcan Partner, Jersey D: +44 1534 82 4274


Just as we have seen robots revolutionise manufacturing – by increasing production rates, improving quality and cost savings – RPA is revolutionising the way we think about business processes.

Deloitte LLP provides audit, tax, consulting and financial advisory services, bringing world-class capabilities and high-quality services to clients. The company has the broadest and deepest range of skills of any global business advisory organisation and is a world leader in the professional services industry. We advise and deliver for the public sector as well as global and local businesses across every industry.


Tel: 01534 760860 Email:

Martin Rowley Partner | Jersey D: +44 20 7007 7665

Theo Brennand Partner, Jersey D: +44 20 7303 0035

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Fiduchi is a leading independent financial services company providing solutions to high-net-worth individuals and businesses around the globe. Our independence ensures we have the flexibility to deliver bespoke solutions - that’s what makes us different! Over 25 years, our director-led teams have built long-term valued relationships with clients and their professional advisors, ensuring a pragmatic and trusted approach to their wealth structuring needs. Using the latest technological cloud-based solutions ensures we have the flexibility to deliver timely and innovative solutions that our clients require. Visit our website to see the comprehensive range of services we provide in the following areas: l Private Wealth l Corporate Services l Fund Services l Yacht Services l Employee Services For more information, visit Alternatively, you can contact: Robert Ayliffe - Executive Director Tel: +44 7700 349 750 Heidi Thompson - Executive Director Tel: +44 7797 966 408 Terry Northcott - Executive Director Tel: +44 7797 715 421 Follow us: Dubai / Jersey / London Fiduchi is regulated by the Jersey Financial Services Commission. Full legal, data and regulatory notices are published on our website. Fiduchi® is a registered trademark of Fiduchi Group Limited.

We are IQ-EQ, a leading investor services group that brings together a rare combination of global technical expertise and deep understanding of clients’ individual needs. We have the know-how and the ‘know you’ to provide a comprehensive range of compliance, administration, asset and advisory services to fund managers, multinational companies, family offices and private clients operating worldwide. We act as a trusted partner to our clients, helping them to invest and preserve their capital in a sustainable and compliant manner. IQ-EQ employs a global workforce of 3,400+ professionals located in 23 jurisdictions, giving us a genuine global reach. We have assets under administration (AUA) exceeding US$500 billion. In the Channel Islands, we have 380 people across our Jersey and Guernsey offices and our expert, director-led private wealth, corporate and fund administration teams work closely with a wide array of international clients as well as their advisers. To find out more and discuss your specific requirements, please contact: Mirek Gruna Chief Commercial Officer, Jersey E: T: +44 (0)1534 714 486 Jacques Vermeulen Chief Commercial Officer, Guernsey E: T: +44 (0)1481 231 941 For more information about IQ-EQ’s global service offering, please visit

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 120 personnel in Guernsey and offers a full range of financial services, including discretionary portfolio management, investment advisory, structured products and credit services. 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. Stephen Burt Branch Manager Jean-Luc Le Tocq Head of Private Banking Craig Allen Head of Investment Management Shaun Kelling Head of External Asset Management 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.

IQ EQ (Jersey) Limited and IQ EQ Fund Services (Jersey) Limited are regulated by the Jersey Financial Services Commission. IQ EQ (Guernsey) Limited is regulated by the Guernsey Financial Services Commission. IQ EQ Management (Guernsey) Limited is licensed by the Guernsey Financial Services Commission under the Protection of Investors (Bailiwick of Guernsey) Law 1987. IQ EQ Depositary Company (UK) Limited is authorised and regulated by the Financial Conduct Authority of the United Kingdom under firm reference number 481843.

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KPMG in the Crown Dependencies is a leading professional firm that delivers audit, tax and advisory services. Operating across the islands of Guernsey, Jersey and the Isle of Man, it is a standalone, locally led partnership with over 450 members of staff. The combined practice forms a core part of the KPMG Islands Group, made up of International Financial Centres and Overseas Territories spanning a sub-region which extends from Malta to the Caribbean. This grouping works closely with other KPMG practices in major global financial centres such as London and New York, ensuring that clients can benefit from an optimal blend of local and global expertise from KPMG’s network. KPMG is a global organisation of independent professional services firms providing Audit, Tax and Advisory services. It operates in 146 countries and territories with over 220,000 people working in member firms around the world. Find out more at Contact details: Neale Jehan Senior Partner KPMG in the Crown Dependencies E: T: +44 (0) 1481 721000

Ogier provides legal advice on BVI, Cayman, Guernsey, Jersey and Luxembourg law. Our network of locations also includes Hong Kong, London, Shanghai and Tokyo. Legal services for the corporate and financial sectors form the core of the business, principally in the areas of banking and finance, corporate, investment funds, dispute resolution, private equity and private wealth. Ogier has strong practices in the areas of employee benefits and incentives, employment law, regulatory, restructuring and insolvency and property. We are a registered listing agent for The International Stock Exchange (TISE, formerly known as The Channel Islands Securities Exchange or CISE) and frequently advise companies listing on other exchanges whether offshore or onshore.

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?

We also provide pan-Island legal services for local Channel Islands businesses and individuals.

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.

Guernsey Redwood House St Julian’s Avenue St Peter Port Guernsey GY1 1WA T +44 (0)1481 721672 E

For further information, please contact:

Jersey 44 Esplanade St Helier Jersey Channel Islands JE4 9WG T +44 (0)1534 514000 E

Follow us: @PwC_CI

John Roche, Partner, Guernsey Phone: +44 1481 752040 Email: Karl Hairon, Partner, Jersey Phone: +44 1534 838276 Email:


64 City edition 2021 To advertise in the directory in print or online contact Carl Methven on

Redcoin – Your Cyber Security is our Priority. Redcoin are a Jersey based IT Security Distributor, providing Cyber Security Solutions, Services and Support across the Channel Islands and UK markets, through our established Reseller Channels. Our objectives are to deliver guidance, education and support to the Islands businesses, to enhance their protection and understanding of the ever-changing Cyber Security Treat landscape. Our Independent security reviews are designed to give a baseline understanding of the Companies current IT position, supported by an informative and high-level report summarizing areas of strength, areas that can be improved by optimizing existing IT investment, along with key areas for consideration when planning future IT spend. Our technology portfolio provides Industry leading technologies, at an affordable cost, for all sizes and requirements of our Channel Islands clients. We can supply and support local resellers with the implementation of chosen solutions or make unbiased recommendations of other more suitable offerings outside of our portfolio. For more information please visit – or email Follow us on Linkedin – Redcoin Limited

Digitalising Corporate Services, Trust and Fund Administrators with integrated software TrustQuay was formed from the merger of Microgen Financial Systems and Touchstone Wealth Management to become the global leader in technology for the corporate services, trust and fund administration markets. With 30 years’ experience, TrustQuay serves more than 450 clients and 17,500 users in over 30 jurisdictions, through 9 offices worldwide in key markets including Jersey, Guernsey, United Kingdom, Luxembourg, Singapore and Australia. The corporate services, trust and fund administration market is undergoing unprecedented change, and the need to help firms leverage technology and digitalise their business models to drive innovation has never been more important, not just from a back-office perspective but with regard to client engagement. TrustQuay offers corporate services, trust and fund administration clients in the Channel Islands and worldwide the strongest product range and widest global coverage to help clients maximise efficiencies, reduce costs, ensure compliance and drive new revenue opportunities. We continually invest in our technology and have the highest targeted R&D spend of any provider in our sector. To find out more about how TrustQuay can help you, please visit our website: Or contact us at

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Data Xxxxxfocus

The City’s international workforce Where the City’s financial services workforce comes from


% of workers


100 Banks 90

Management consulting


Legal services

Insurance and pensions

80 70 60 50 40 30 20 10 0


With the financial services sector becoming increasingly competitive when it comes to the war for talent, the City, it seems, is increasingly drawing on international workers. Research caried out this year by the City of London Corporation revealed that the banking sector is the most reliant on international staff – accounting for half of all workers – followed by management consulting and tech. The research also revealed that City financial services and professional services employees born outside the UK came predominantly from France, Ireland, India, Australia, South Africa and the US. Overall, 40% of the City’s workforce is now made up of staff who were born overseas. Source: City of London Corporation


We get straight to the point, managing complexity to get to the essentials. Every piece of work is a collaboration. We listen actively, asking the right questions, focused on what really matters. We deliver targeted, pragmatic advice with absolute clarity. To the point. Legal Services British Virgin Islands Cayman Islands Guernsey Hong Kong Jersey London Luxembourg Shanghai Tokyo

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