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Global conditions hit value of Guernsey funds in quarter one

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Continuing volatility in the global markets resulted in the value of Guernsey funds falling by GBP24.5bn or 12.2 per cent during the first quarter of the year, according to Guernsey Fin

Continuing volatility in the global markets resulted in the value of Guernsey funds falling by GBP24.5bn or 12.2 per cent during the first quarter of the year, according to Guernsey Finance.

The contraction took the total value of funds under management and administration in the island to GBP175.9bn at the end of March 2009. This represents a decrease of GBP27.9bn (13.7 per cent) year on year.

The Guernsey Financial Services Commission has reported that the ongoing adverse performance of the global hedge fund sector has been a major contributor to the fall in asset values during the first three months, but an improvement in global equity markets since the end of March is expected to result in the value of assets growing during the second quarter.

Peter Niven, chief executive of Guernsey Finance, the promotional agency for the island’s finance industry, says: ‘During the first three months of the year a certain amount of new business was still coming through but clearly this was at lower levels than in the last two or three years when we had record flows. We saw good ideas being proposed across a range of different asset classes but many investors were waiting for further falls in global asset values before coming back into the market.

‘The positive news is that while some investors might still not believe that we have reached the bottom there is undoubtedly greater confidence around at the moment, which is reflected in the improvement in global equity markets. As a result we expect to see the value of funds in Guernsey holding up better and growing during the second quarter.’

The figures from the GFSC show that the value of Guernsey domiciled open-ended funds fell by GBP11.1bn (17.4 per cent) over the quarter and were down GBP19bn (26.6 per cent) year on year to reach GBP52.5bn at the end of March.

The closed-ended fund sector also fell in value during the quarter, with a reduction of GBP9bn (9.8 per cent) but was up GBP3.5bn (4.4 per cent) during the past 12 months to reach GBP82.5bn at the end of March.

Non-Guernsey schemes, for which some aspect of management or administration is carried out in the Bailiwick, decreased by GBP4.4bn (9.8 per cent) over the quarter and were down GBP12.4bn (23.3 per cent) over the year to reach GBP40.9bn at the end of March.

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