Open an Investment Fund in Guernsey
Updated on Monday 30th July 2018
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Investors who are seeking to expand their investment activities on other markets may choose Guernsey, a well-established jurisdiction for the registration of investment vehicles. At the level of March 2018, Guernsey had a total of 969 funds under management and administration (considering its population of only 63,000 citizens) and those who are interested in how to start a investment fund in this country should know that, as a general rule, they will need to obtain an authorization for operations on this market from the Guernsey Financial Services Commission (GFSC).
What entities are involved in the activity of a Guernsey fund?
Regardless if an investor will set up a hedge fund startup or another type of investment vehicle, several entities (represented by natural persons and institutions) will have to be involved in the fund’s activities. As a general rule, an investment fund is represented by the following:
- lawyers or advisors who have an in-depth experience on the legislation referring to the registration of a fund;
- fund manager – it is important to appoint a person with a solid experience, as he or she will take investment decisions and will invest the fund’s assets;
- custodian – in the case of vehicles registered as closed-ended funds it is not always imposed by the law to appoint a custodian;
- fund administrator – a compulsory requirement for all Guernsey funds, which need a Guernsey-based administrator.
Legislation regulating Guernsey funds
Following the legislation applicable in this jurisdiction, investors will need to choose between open-ended and closed-ended structures, which are further on divided into several classes of funds that have specific characteristics. This is a basic requirement for those who are interested in the procedure on how to start a fund here.
Investors may set up a vehicle under the regulations prescribed for collective investment schemes or for private investment funds, the latter being a newer class of funds introduced by the local authorities in 2016, under the Private Investment Fund Rules 2016. Foreign investors are invited to contact our team of affiliates in Guernsey for a complete presentation on the new investment fund law.