Hedgeweek: Regulation prompts fund managers to reconsider domiciles and avoid burdening costs

18 January 2012

A greater focus from regulators and investors has led to an increased number of hedge fund and private equity managers actively considering strategic moves to more favourable domiciles.

Emerging regions are particularly appealing to investors and as such managers are now looking at the business potential of setting up a presence overseas.

Regulation has been a key driver for this trend following the 2008 Madoff scandal and a general shift towards greater transparency across global financial markets. 2011 has been no exception, with laws being tightened and new proposals such as the Alternative Investment Fund Managers Directive (AIFMD) under discussion.
 
With such operational and regulatory concerns at the front of manager’s minds, the ‘Re-domiciling & Co-Domiciling for Fund Managers’ report seeks to uncover why these funds can add value to businesses and assesses the key decisions that must be considered. This report takes a look at several of the key fund jurisdictions from each geo-political region: Guernsey (non-EU/Europe), Bermuda (non-EU/Caribbean) and Malta (EU).
 
Fiona Le Poidevin, Deputy Chief Executive at Guernsey Finance, points out the importance of regulatory changes: “Now is the time for managers to look at re-domiciling or co-domiciling”, she says. “The global financial crisis came to a head in 2008, but more than three years later, the wave of repercussions continues. This is particularly true in the eurozone but also across global markets."
 
“The financial crisis has brought a renewed focus on improved standards including a raft of regulatory proposals, e.g. AIFMD. Guernsey’s position outside the EU will enable it to offer a less prescriptive regime for funds not touching this marketplace and this is no doubt helped by the fact that Guernsey has a tax exempt regime for collective investment schemes.”

Full article

© Hedgeweek