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Guernsey Secures USD1.2bn Fund From Ireland

by Jason Gorringe, Lowtax.net, London
13 October, 2014

Investec Asset Management has migrated a USD1.2bn fund from Ireland to Guernsey. The move was reportedly due to the EU's Alternative Investment Fund Managers Directive (AIFMD), the transitional period for which ended in July.

Investec International Funds, a fund of funds unit trust, received approval from both the Irish Central Bank and Guernsey Financial Services Commission to make the move, and has now been registered as a Guernsey Class-B open ended unit trust.

Mourant Ozannes, which advised Investec, said that the decision to migrate was due to Guernsey's flexible AIFMD regime and position outside the EU. Guernsey offers a dual regulatory regime and can service funds that are outside of the scope of European legislation.

Grant Cameron, Managing Director of Investec Asset Management Guernsey Limited, said: "We are very pleased with the ease with which this re-domiciliation process was managed given the complexities involved. Some of the work performed on the re-domiciliation was ground breaking."

The AIFMD was introduced to improve oversight of funds marketed to EU consumers, and a transitional period ended on July 22, 2014. EU managers marketing EU Alternative Investment Funds (AIFs) are required to obtain an EU-wide passport to market their funds to professional investors. Non-EU AIF managers or non-EU AIFs managed by EU AIF managers will be unable to obtain a passport until at least 2016, and must instead seek to market the funds through a National Private Placement Regime (NPPR).

Guernsey is not in the European Union and therefore considered a "third country" for the purposes of the AIFMD. In response to AIFMD, and to cater for its global client base, Guernsey adopted a "dual regime" with two parallel regulatory regimes for investment funds – offering either the existing regime, for managers and investors not requiring an AIFMD-regulated fund, or an opt-in regime which is fully compliant with AIFMD.

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