Using offshore fund service providers

With the legacy of the financial crisis all but forgotten, investment in alternative asset classes continuing to garner strength and global sentiment in the markets steadily rising, the demand for fund services is thriving – particularly in offshore financial centres.

Based primarily in the Crown Dependencies (most notably Jersey, Guernsey and the Isle of Man) or British Overseas Territories (such as the British Virgin Islands, Cayman Islands and Bermuda), offshore financial centres afford advantageous tax regimes and a proven track record of expertise, providing an attractive environment from which fund managers can benefit.

Historically, Bermuda and the Cayman Islands have been recognised as the preferred jurisdictions for Asian businesses wishing to utilise the benefits of offshore structures, either to facilitate foreign investment into Asia, or for domestic investors wishing to invest outside of the region. More recently however, the Channel Islands – specifically Jersey and Guernsey – are becoming increasingly popular as a funds domicile for Asian investors.

Why establish an alternative fund structure in the Channel Islands?

Recent events in the more lightly regulated offshore financial centres (think Panama and the Mossack Fonseca data breach) have seen global investors understand the benefits of governance and the additional rigour of structuring a fund in a well-regarded and sophisticated offshore financial centre like the Channel Islands.

With their robust regulatory frameworks (in many cases exceeding the transparency standards of the larger onshore economies) and political, economic and financial stability, the Channel Islands rank among the top international financial centres in the world. In addition, fund managers are increasingly attracted to the Islands due to the ability to outsource the fund administration of their structures to specialist high quality providers.

The evolution of fund administration

Fund administration has evolved significantly in recent years and includes the provision of many different services – from company secretary to cash and treasury management; registered office and directorship services to custodian, compliance and accountancy services (including the preparation of audited financial statements) – to funds and fund managers around the world.

For many fund managers, who have historically carried out the administration of funds in-house, it defies financial sense to continue to invest in building internal teams. Instead these managers are taking advantage of the growth and advancements in technology and software that offshore providers, for example in the Channel Islands, are at the forefront of.

These technology platforms, which are specifically designed to deal with cross-jurisdictional structures, have the capability to produce advanced investor and regulatory reporting. This not only significantly reduces the burgeoning resource requirements for managers but also markedly improves the quality of services provided to investment managers and investors within this challenging marketplace where tax transparency and regulatory reporting are key deliverables.

Expect Moore

Moore Management is a leading specialist provider of offshore fund services in Jersey, Guernsey and the Isle of Man. Our talented, driven people utilize leading edge technology to meet our clients’ specific needs and exceed their expectations. Should you wish to discuss any matters concerning offshore fund structuring or administration, please don’t hesitate to contact me.

E: Jon.Trigg@mooremanagement.com
T: +44 (0) 1534 822 545

 

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Related articles you may be interested in:

  • Why work with an independent provider? - Manabu Nagano highlights the main reasons why someone would require an independent service provider to support the operational delivery and/or governance of an offshore fund structure

 

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