Guernsey’s Funds community gathered in London last week to discuss Sustainable Finance, the island’s attractiveness and commitment to fostering growth in this market, and how the island is a natural home for Venture Capital.

Guernsey was the world’s first jurisdiction to launch a regulated green fund regime, the Guernsey Green Fund (GGF) designation, in 2018, with a Net Asset Value of over £5.1 billion.

The island is demonstrating agility and proactivity in this space. The Green Fund Rules are only 30 pages long, digestible and easy to understand. Guernsey is actively looking to be an innovator in this area.

Imperium Director Charlotte Parr spoke on the second panel, which discussed how Guernsey bolsters investment into sustainable projects, which we have seen done via Venture Capital (VC) funds.

City law firm Prosakuer’s recent European Venture Capital Fundraising Market Report showed the Channel Islands as one of the most prevalent jurisdictions for venture capital fund domiciliation, with around 39% of all venture funds domiciled in either Guernsey or Jersey.

Guernsey is a familiar jurisdiction for fund managers and investors. The island has been doing this for more than 50 years, and there is a deep understanding of the lifecycle of the fund and VC Manager. Their expectation mirrors our approach at Imperium; they expect cost sensibility, the ability to grow with managers, and the ability to be proactive and efficient.

In addition to the traditional GP/LP structure, Guernsey’s PCC structure also provides those looking to be more creative a vehicle with flexibility, and the ability to split their investment strategy, investors or assets using cells, for example, having a specific sustainable strategy per cell. For managers looking to establish a track record, an unregulated PCC with a single investor or single asset per cell can be a quick and easy option.

Another alternative for Managers wanting to make sustainable investments is through the island’s simple regulated funds regime. The traditional Registered route has fewer limitations, or the lighter touch Private Investment Fund limits you to 50 investors but allows cost savings without needing a full Prospectus or share capital.

The key to launching a fund is investors’ appetite, considering where they are based is important when structuring the fund. Using the National Private Placement Regime (NPPR) allows you to access certain EU investors. However, suppose you only want to market in one to three jurisdictions. In that case, consideration must be given to how much being in the EU will cost vs. being outside of it over the fund’s lifecycle.