Top Take Aways from the Guernsey Funds Forum 2020
20 May 2020
1. People v profits – the immediate response to the COVID 19 crisis
When the crisis hit our shores, whilst there were obvious concerns for the economic impact on business profits and the uncertain future ahead, the immediate response from the industry was to focus on its people, how to support employees with working from home and ensuring their general wellbeing and how to continue to service clients with minimal disruption, particularly during the busy valuation period. "The response has been superb" (Jon Moulton)
2. Business as usual
Following on from the above, the overwhelming sense is that it is very much business as usual from a Guernsey financial services perspective. Whilst we might see some reductions in fee generation due to valuations and a slowdown of new business generally, administrative services still need to be performed and are being performed well. The island has the benefit of its historically strong financial services industry and its well-trained, experienced workforce who have shown great resilience despite the challenges faced. New funds are still being raised and new promoters are still interested in bringing their business to Guernsey so there is opportunity here for Guernsey to advance.
3. There are challenges ahead but also opportunities
Undeniably there will be casualties of this crisis, most notably in the retail and hospitality sectors and the aircraft financing and leasing industry and the true impact on the funds industry as a whole remains to be seen; however, there is still money out there to be invested, with around “1.5 trillion dollars of dry powder” believed to be available for deployment, private equity businesses are in a good position to weather the storm and certain sectors may well boom, the medical research/technology market in particular and fulfilment/delivery businesses. The listed sector has been hit hard with falling share prices and suspension of dividends causing concern for investors; however, the view is that there is still value in the market and the signs of recovery in the Asian markets is a cause to remain positive. It was noted that following the 2008 banking crisis, the years 2009-2011 were the most productive periods for Guernsey and Jersey domiciled listed funds in the last 12 years.
4. Guernsey remains a leading choice
The concluding message is that, despite these challenging times, Guernsey remains a leading choice for investment business and the island is committed to continuing to deliver its high standard of financial and legal services. There are opportunities to be made in certain sectors and Guernsey needs to maintain its sensible and reliable regulatory environment to remain at the forefront.