Guernsey has made significant gains in the number of funds domiciled on the island that are registered to be sold to retail investors in South Africa.
Figures from the online register of the Financial Sector Conduct Authority (FSCA) in South Africa showed that at the end of January 2020, Guernsey was the domicile for 17 structures and 59 funds or sub-funds of umbrella funds.
This moves the island into the top three foreign markets for South African managers for sale back into their domestic market.
Over the past three years, Guernsey has claimed almost 25% of the market for new fund portfolios established by South African investment houses including Momentum, PSG and Peregrine.
During that period, the number of structures established in Guernsey has risen by 21%, and associated portfolios by 73%.
South African managers also make significant use of Guernsey’s pioneering protected cell and incorporated cell structures for their offshore funds.
Historical link
The growth in South African business on the island reflects the strong historical links between South African fund managers and wealth managers, and the island’s growing appeal for all sectors of financial management, including investment funds, private wealth, banking and pensions.
Christopher Jehan (pictured above), Chairman of the Guernsey Investment and Funds Association and Principal of funds consultancy Midshore, who analysed the FSCA register, commented: “There are a lot of long-term connections between Guernsey and South Africa and a lot of business coming to the island over the past few years.
“Guernsey is recognised in South Africa as being a quality jurisdiction, well regulated and well managed, with significant substance behind businesses, and offering tax neutrality.
“The South African market is also seeing that Guernsey funds are real competitors to the standard European UCITS model.”
Promotional visit
Jehan is part of a Guernsey delegation in South Africa at the end of February to promote the island’s investment funds capabilities, led by James Crawford (pictured left), Director of International Business Development at Guernsey Finance.
“South Africans often invest their offshore allowance into mutual funds operated by the same fund managers who manage their money at home but domiciled in an offshore finance centre such as Guernsey,” said Crawford.
“Following the relaxation of exchange controls, investment managers in South Africa have realised not only the opportunity to reinvest client money outside of the country, but also to encourage capital from overseas institutions and high-net-worth individuals into the country.”