The Guernsey Financial Services Commission authorised a total of 39 new open-ended schemes and gave its consent for 36 new closed-ended funds during 1997, with the total number of Guernsey funds under management at year end reaching a high of 372. A further 50 sub-classes of existing umbrella funds were approved resulting in a total of 505 active open-ended investment pools at 31 December. The total value of funds under management at 31 December 1997 amounted to £16.5 billion, up 23.5% over the year.
In addition, approval was given to various Guernsey institutions licensed under the Protection of Investors (Bailiwick of Guernsey) Law to provide either management, administration or custodial services to 45 new non-Guernsey schemes during the year (compared to 14 such schemes in 1996). The total value of such funds reached £4.6 billion at the end of 1997.
The Asian crisis took its toll on global financial markets in the last quarter of 1997, and this was reflected in the underlying value of funds. The net asset value ("NAV 3 5) of Guernsey open-ended funds (see endnote 1) declined by 6.5% from the previous quarter and ended the year with a total value of £1 1.3 billion. However, the NAV of open-ended funds under management has increased 25% from the previous year end and the outlook remains positive with a further 22 funds in the pipeline, featuring continued interest in emerging markets and global equities.
The number of funds in the closed-ended sector (see endnote 2) increased by a net 6 to a record total of 192 funds. The value of funds under management decreased by some 8% over the last quarter for a total of £5.3 billion, although the underlying value increased by 19.5% over the year. A further 12 closed-ended funds are in the pipeline, with emphasis on property funds, hedge funds and emerging markets.
During the course of the year, 26 fund sponsors not previously represented on the Island launched funds. Guernsey currently has fund sponsors by institutions from 38 countries and the attached schedule illustrates the international appeal of Guernsey as a jurisdiction for the establishment of offshore funds.
ENDNOTES:
1. Open-ended schemes are funds which are offered for sale throughout the life of the fund and without limitation on the shares/units which investors are entitled to redeem on demand subject to any applicable notice period.
2. Closed-ended schemes normally have a fixed capital issued once and for all and investors have no absolute entitlement to redeem their shares/units.
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