London can benefit from the certainty of Guernsey’s position outside the EU, a panel agreed at this year’s Guernsey Funds Forum in London.
Guernsey’s stability and security means that is well placed to help fund managers overcome Brexit uncertainty over the next couple of years, the panel said.
The panel discussed the challenges and uncertainty that Brexit poses for fund managers. They drew upon Guernsey’s long-standing stability and experience in operating as a ‘third country’ outside the EU.
Alex Barr, global head of private markets and real estate investment oversight at Aberdeen Standard, said that uncertainty on covering costs, people, models, and route to market was the “single biggest issue” facing the funds industry.
He said that many larger firms were moving to create pan-European operating models in response to improve speed of reaction.
According to another panellist, Janwillem Acket, chief economist at Bank Julius Baer, ‘wait-and-see-policies’ were a drag for the UK economy.
Acket said: “The UK should have a clear agenda for what it wants, do away with its illusions, and expect the loss of the EU passport—you can’t exit a club and still request to have all the privileges.”
“Capital is very mobile and that is something we should never forget. Capital goes where it gets the best services. London has a great reputation, but you have to look to improve your service and make yourself so competitive, when you lose the passport you still operate successfully.”
“Guernsey has done this quite well as a non-EU jurisdiction, using both sides of the coin and doing a good job. You can be a nice model for the reaction pattern London should take to react to the loss of the passport,” he added.
Funds lawyer, Leith Moghil, partner at London firm Reed Smith, said that the AIFMD passport had not proved to be the “fantastic weapon” as hoped, with use surprisingly low.
The panel also discussed how the industry would deal with change. Fiona Carpenter, partner at PwC in London, said that if any industry was capable of dealing with change, it was the funds sector.
“We are used to change and managing uncertainty. Some managers have some very detailed plans with a wide range of responses, and much more structural change is being built into plans,” she said.
The discussions highlighted at Guernsey Funds Forum highlighted opportunities for Guernsey and it’s determination to maintain alignment with international regulatory standards, according to Domonic Wheatley, chief executive of Guernsey Finance.
“The uncertainty caused by Brexit also provides an opportunity for Guernsey, both for innovation and, together with the UK, to develop working models to help managers through the transition process.”
“We have repeatedly been held up as a model for the UK to follow post-Brexit as a third country outside the EU and it was also reassuring to hear that if the money will follow where services are best, then Guernsey is ideally placed,” he concluded.
