Regulatory arbitrage between the UK and Guernsey is manifesting itself in the form of lower operational and overhead costs, which means managers based in the jurisdiction can charge lower fees to investors – benefitting the local fund industry, according to Craig Cordle, group partner at law firm Ogier.
“The benefit from Guernsey’s point of view is that if your structure permits you to set-up offshore in Guernsey, as opposed to London, your costs will likely be lower. As soon as you’re in the UK, the operational costs increase. Additional service providers, such as depositaries, will be required and the overheads are naturally higher.”
Citing Guernsey Financial Services Commission figures, Cordle said that in the 12 months to June 2016, there was a 12.3% increase in the net asset value of all funds under management and administration to £247.1bn in the jurisdiction.