By

Connie Helyar

Managing Director

International Private Equity Services Ltd

Private Equity Funds in Guernsey

Which Jurisdiction for Fund Formation?

• How do you decide where to base your fund?

• Bermuda, BVI, Cayman, England, Wales, France, Germany, Luxembourg and the Netherlands…

• Take advice from your professional Adviser?

• Make your own decision?

Choosing a Jurisdiction

• Proximity

• Transport links

• Time zone

• Language

• Track record of jurisdiction

• Recognition by target investors

• Needs clearly crafted, modern limited partnership and company law

• Fiscal transparency

Choosing a Jurisdiction

Location

Guernsey Funds Industry – The Facts

• Booming fund industry!

• Euro130 billion under management

• Over 600 funds & 1,200 sub-funds

• 30% growth p.a. in funds – dominated by private equity

• No less than 45 fund administration companies

• Most of the world’s biggest private equity investors invest in Guernsey funds

• Highest standard of regulation

• Fast track authorisation process

• Specialist private equity expertise!

Guernsey Funds Industry – The Facts

Promoters – Guernsey Private Equity Funds

Alchemy

Permira

Terra Firma

ABN Amro

BC Partners

Apax Partners

Nomura

Macquarie Bank

Electra Europe

Greenpark Capital

PPMAccess Capital

Partners

Baring Vostok

Polytechnos

Hg Capital

Coller Capital

PAI

• What else do Private Equity Fund Promoters want?

Promoters – Guernsey Private Equity Funds

Limited Partnership Structures

• No stamp duty on transfers of interest

• Limited partners can take some management role

• No limit on limited partner numbers • Can select legal personality & still be fiscally transparent • No disclosure of identity of limited partners

• Is there anything else that Fund Promoters look for?

Promoters – Guernsey Private Equity Funds

Excellent Support Services

• Good corporate governance

• Expert directors

• Quality corporate secretarial & compliance support

• Professional expertise

• Value added service

• Tax Exempt Companies

• Unit Trusts

• Protected Cell Companies (“PCC’s”) • Shortly introducing Independent Cell Companies (“ICC’s”)

Other Guernsey Structures

Features of PCC’s

• Each cell ring-fenced in the event of liquidation

• PCC’s now being utilised for unique private equity schemes

• Company can be migrated to Guernsey & assets split into separate cells • ICC’s to protect trading between cells

800 years of fiscal independence

• No capital gains tax

• No VAT

• No Inheritance Tax

• No tax on disposal of limited partnership interests

• Tax transparent limited partnerships

Guernsey Proposed Reform

• Working party to review the investment fund industry

• Fundamental changes to system of regulation expected

• Reduce number & scope of funds requiring regulation

• Tax reforms in 2008

• Outcome likely to underpin Guernsey’s pre-eminent position in financial services

• Its own separate Legal System

• Its own Government

• A robust but not onerous Regulatory System

• Qualified Investor Fund regime

• Has its own Stock Exchange

Other Benefits of Choosing Guernsey?

• The Channel Islands Stock Exchange set up in I998

• Not bound by European Union Listing Directives considerably more flexible in its approach

• Classified by FSA as a “designated investment exchange”

• Recognised by the US SEC as a “designated offshore securities Market”

• Offers a competitive pricing structure

The Channel Island Stock Exchange

• Has an excellent business reputation

• Is competitive and always ahead of the game

Offers a high level of knowledge & expertise

• Has an excellent infrastructure

• Is 35 minutes by jet to and from London Gatwick

• Has quality healthcare, schools and lifestyle

If all that isn’t enough…

• A temperate climate

• Superb restaurants

• Fantastic people!

And what’s more…

A great place to be…

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