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Opportunities in financial synergies between SA and Guernsey

Nov 27 2017 17:28
Carin Smith

Cape Town - Synergies already existing between South Africa and Guernsey's financial sector could be enhanced even more, according to Christopher Jehan, managing director of Midshore Consulting in Guernsey and vice-chairman of the Guernsey Investment Fund Association.

He was part of a delegation visiting Cape Town recently in order to educate local financial services professionals on what Guernsey can offer – that is well-established investment fund regimes that offer a viable alternative to Ireland and Luxembourg, as well as the private investment fund which was launched more recently.

"SA pension funds are allowed to put 25% of their investments outside of SA. In this way offshore funds can complement local investments," Jehan told Fin24.

"Guernsey's financial services sector has flexibility. It also has a fairly-sized number of SA expats and links to key SA businesses like banks."

Flexibility

In his view the flexibility offered by Guernsey is probably the most important benefit for SA investors.

"Guernsey has its own regulator and government. We can enable change by talking to our government and our regulator is pragmatic, receptive and tends to be in favour of more flexible products," he explained.

Paul Wilkes, group partner in offshore law firm Collas Crill, added that the purpose of the delegation's visit to SA was to educate professionals in more detail about the role Guernsey can play.

"We want to build on the links already existing. Guernsey's fund sector has had decades of connection to SA and is seen as the gateway for investors into and out of the country," he told Fin24.

"We came to SA to educate people on why they should use Guernsey. These reasons include our expertise in fund management, the support of our regulator, the speed with which things are handled as well as the cost benefits."

Despite there being a lot of uncertainty in the world - North Korea, American President Donald Trump and Brexit, to name but a few factors - Wilkes said investors cannot just sit on cash for ever.

"That is why one cannot invest on mere sentiment. There remain excellent investment opportunities that my clients are pursuing and, perhaps, the general uncertainty helps by reducing competition for some assets with strong fundamentals," he explained.

According to Wilkes, onshore Europe's financial services sector can be overly regulated, while the Caribbean can be at the other end of the spectrum.

"Guernsey can be seen as offering a third option regarding regulation, namely somewhere in the middle," he said. "Guernsey offers investors the choice of not being tied up on red tape, yet having corporate governance oversight."

James Travers, technical manager of Guernsey Finance, also emphasised Guernsey’s role as a gateway in and out of South Africa.

"After 50 years in the business, Guernsey has developed a specialised product to facilitate international capital flows. It has the whole package," he explained.

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investment  |  money  |  offshore investment
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