172 Channel Islands: Guernsey
Chamber of commerce: Professional body:
Suite 3 The Guernsey Bar
16 Glategny Esplanade Web: www.guernseybar.com
St Peter Port
GY1 1WN Guernsey
Tel: +44 1481 727 483
Fax: +44 1481 710 755
Recent legislative developments There have been two recent highlights in Guernsey trust legislation
the establishment of Guernsey funds. Recent changes to Guernsey trust law are
Russell Clark and Ben Morgan A number of Guernsey funds took the designed to create a more ﬂexible framework
Carey Olsen opportunity to list under Chapter 14 of the for the local trust industry and to ensure that
London listing rules (the so-called European Guernsey remains competitive as a jurisdic-
The Bailiwick of Guernsey comprises the directive minimum route). This opportunity tion for the establishment and administration
islands of Guernsey Alderney and Sark, of closes at the end of 2007 with the introduc- of ﬁduciary structures, and at the forefront of
which Guernsey is the largest by far, lying in tion of a single platform for all funds, except legislative developments across the globe.
the Gulf of St Malo, 60 miles southwest of those that plan to list on a proposed new One of the most signiﬁcant changes is the
England and about 30 miles west of northern Specialist Funds Market, details of which were introduction of non-charitable purpose trusts.
France. announced in July. The Financial Services Rather than bringing in a completely separate
Guernsey enjoys full ﬁscal autonomy in tax Authority’s announcement of this new market regime for purpose trusts – a route preferred
and regulatory matters and has its own judi- is a signiﬁcant move for the London Stock by certain other jurisdictions such as the
cial system. It is a British Crown Dependency Exchange, as it looks to ﬁll a perceived gap Cayman Islands and the British Virgin Islands
but is largely independent from the UK between the main market for listed funds and – Guernsey has simply revised the law remov-
except in issues relating to external affairs. the Alternative Investment Market. ing the requirement for there to be beneﬁcia-
The new market will aim to provide ﬂexi- ries to a trust. One of the common uses for a
Investment funds bility for specialist fund vehicles such as hedge purpose trust is to incorporate and be share-
Guernsey continues to enjoy extraordinary funds and private-equity vehicles. A London holder of a private trust company (PTC)
times in terms of the sheer volume and size of listing will be a big plus for investors in terms which in turn acts as trustee to a speciﬁc trust
funds coming into the island with a record of raising a fund’s proﬁle, but also, ultimately, (or group of trusts).
value of over £140 billion under management in providing liquidity. The principal beneﬁ- The new law also removes the limit on a
and administration, recorded in May 2007 by ciary of this new market, in terms of the trust’s duration (previously 100 years) allow-
the Guernsey Financial Services Commission. fund’s domicile, is likely to be Guernsey, given ing the creation of perpetual trusts. Under the
The growth is largely due to innovative devel- the current preference to establish offshore revised legislation, assets can be decanted
opments in Guernsey’s funds legislation by London listed funds in Guernsey. from one trust to another even where the sec-
the authorities, ensuring that the island In February 2007 Guernsey introduced a ond trust is of a longer duration than the ﬁrst
remains wholly competitive as a jurisdiction fast-track approval process for all closed- – ﬁnally ending the debate among practition-
for funds. ended funds, creating a new registered fund ers as to whether this was allowed under the
A significant number of new investment regime. This has undoubtedly assisted in 1989 law.
vehicles established in Guernsey are listed maintaining Guernsey’s position as an attrac- The revised law creates a non-possessory
vehicles. A large proportion of the listed tive jurisdiction for the domicile of funds, the lien over trust assets in favour of the retiring
funds have been high-profile, including the clear advantage being that the new process trustees and simpliﬁes the ability of a previous
launch of KKR’s limited partnership as a ensures a fund’s launch within 72 hours. trustee to enforce an indemnity given in its
Euronext-listed vehicle, which recently won Registered funds can be single or multi-class favour where it is not a party to the indemni-
the IFLR’s award for European private-equi- unit trusts, investment companies, protected- ty. This aims to facilitate changes of trustees
ty deal of the year. Stock market conditions cell companies or limited partnerships, and to avoid the sometimes complex chain of
permitting, the growth in listed funds is like- whether listed or unlisted. The only investor indemnities in cases where there have been
ly to continue as a trend. A considerable restriction is that the fund must not be offered successive changes in trustee. The process can,
number of the vehicles which have been directly to the public in Guernsey. Plans are at times, become laborious. The new regime is
established in Guernsey have been trend-set- also afoot to introduce a similar registered intended to make the transfer process more
ting. The herd mentality of the fund indus- fund regime for open-ended vehicles in the efﬁcient for all concerned.
try is such that when a new structure is coming months. The majority of closed- The 2007 law has been redrafted so that
launched in Guernsey it is replicated by ended funds are now being established as reg- the terms of the trust may expressly exclude
other fund managers. Guernsey’s pioneering istered funds. Given its success in relation to discretionary beneﬁciaries’ rights to informa-
approach in accommodating new structures closed-ended funds, it is extremely likely that tion, without denying the overriding right of
and new ideas has undoubtedly benefited the the regime will be every bit as successful for any beneﬁciary to apply to the court for infor-
island. open-ended funds. mation. The objective of this change is not to
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Financial and corporate | Channel Islands: Guernsey 173
routinely deny beneﬁciaries information, but Carey Olsen used an identical model when bank Landsbanki, a deal which was lead by
where a settlor is genuinely concerned that it acted on the $1.5 billion Apollo Alternative partner David Moore.
certain information should be kept conﬁden- Assets listing on Euronext in August 2006. On the funds side, the ﬁrm advised on the
tial from beneﬁciaries until, for example, they Graham Hall leads the investment funds team establishment of a closed-ended fund for
have demonstrated an ability to provide for and is praised by rivals for being “very com- Babcock and Brown Public Partners and cre-
themselves, the facility is available. mercial, very practical and having a sound and ated three new cells of a structured derivatives
fundamental understanding of law”. platform for Harewood Structured
The ﬁrm also acted for private-equity ﬁrm Investment.
Permira on three notable deals: the launch of
the 11 billion Permira IV fund, the acquisi- Leading lawyers
Financial and corporate tion of the Swiss JET Aviation Group by Gavin Farrell
Permira Europe III and the acquisition of Peter Harwood
Recommended ﬁrms Birds Eye Frozen Foods from Unilever. David Moore
Tier 1 The commercial and banking team is
Carey Olsen headed up by Nigel Carey, who one peer
Ozannes praised as being one of the few lawyers who Collas Day
can cover both Guernsey domestic and inter- Collas Day had a bumpy year internally, with
Tier 2 national work. its litigation team departing in March 2007
Collas Day Carey Olsen’s commercial highlights and partner John Lewis moving across to
Ogier include acting for Propinvest and JPMorgan Mourant’s Jersey ofﬁce in June 2007.
in relation to a series of £100 million proper- In spite of the turbulence, peers still see the
Tier 3 ty acquisitions and disposals, advising ING on ﬁrm as strong on a range of domestic and
Babbé the acquisition of Jersey Property Unit Trusts international corporate and commercial deals.
and issuing various classes of commercial Collas Day boasts a strong M&A practice,
Without a doubt the biggest event in the mortgage-backed floating rate notes for which recently advised on Barclays’s purchase
Guernsey market this year was the $5 billion Société Générale in a £1.12 billion loan secu- of ﬁduciary services company the Walbrook
listing of KKR Private Equity Investors’ per- ritization. Group and guided Alternative Investment
manent capital vehicle on Euronext in Market (Aim)-listed Ekay’s purchase of
Amsterdam which was awarded the IFLR Leading lawyers Wallace Barnaby, a Channel Islands advertis-
European Equity Deal of the Year award for Nigel Carey ing agency.
2007. The listing brought Guernsey onto the Graham Hall The ﬁrm were also active in ﬁnancing, act-
US radar, with one ﬁrm remarking that with- ing on RGI International’s $180 million Aim
in hours of the deal’s completion 20 private listing and subsequent share offering in
equity ﬁrms were on the phone wanting to do Ozannes December 2006.
copycat deals. “The amount of work it gener- Ozannes, one of the two largest ﬁrms in In addition, Collas Day acted as Guernsey
ated was enormous,” said another Guernsey Guernsey, had another busy year on the cor- counsel for a consortium of high-proﬁle banks
partner. porate and commercial front. Team head Peter in relation to an SKr865 million ( 93.5 mil-
Other signiﬁcant developments this year Harwood continues to attract praise from all lion) banking facility for the Capio
have included the implementation of the reg- corners. “He’s experienced and always delivers Healthcare Group.
istered closed-end fund and incorporated cell – he really stands out,” said an opposition Other highlights for the year included
company structures, which allow Guernsey to partner. One client said Harwood’s 20 years of Fortis Bank’s £49 million purchase of CI
be more competitive as an offshore jurisdic- experience was a signiﬁcant factor in appoint- Traders’ Guernsey ofﬁces and completing the
tion. ing Ozannes. ﬁrst listing and registration of a Guernsey
“There’s a great deal of variety and innova- There were a number of personnel move- incorporated cell company.
tion in the corporate and commercial sphere ments at Ozannes this year, with three associ- A client described the ﬁrm as “very ﬂexible
in terms of structure, reliability and combina- ates arriving from Australia and New Zealand in terms of scheduling and delivery time
tions of vehicles and jurisdictions,” said one and two senior associates departing to rival scales”, adding: “When there are issues with
partner. “There’s no such thing as a standard ﬁrms. Christopher Anderson left to become a clients, they are good at helping work through
transaction any more.” partner at Bedell Cristin’s ﬂedgling Guernsey the problems.”
ofﬁce, while Caroline Chan moved across to The “very practical and commercial” Ian
Ogier. Kirk is singled out for praise from rival ﬁrms
Carey Olsen Ozannes’s headline deal was acting as and clients alike, while Sean Chong was
“Carey Olsen had a storming year,” one rival Barclays Capital’s Channel Islands adviser in a described by one client as “exceptional at
remarked. “They did the deal that got £1 billion reﬁnancing transaction in August keeping a complicated project on plan”.
Guernsey noticed.” The ﬁrm represented the 2006. This involved repackaging debt facili-
$5 billion KKR Private Equity Investors per- ties to create a bespoke product and was com- Leading lawyers
manent capital vehicle listing on Euronext on pleted in only four weeks. The deal was sig- Sean Cheong
the issuer side, cementing its position in the niﬁcant for Ozannes as it was the ﬁrst time the Ian Kirk
top tier in the process. The fund was estab- ﬁrm had worked with its Jersey ofﬁce on a
lished as a Guernsey limited partnership and large transaction.
listed on Euronext – one of a handful of The practice also won a role advising on
exchanges that allow the listing of limited the £21 million sale of Cheshire Building
partnership structures. Society’s Guernsey operation to Icelandic
2008 EDITION www.iﬂr1000.com
174 Channel Islands: Guernsey | Financial and corporate
Ogier Leading lawyers
Ogier is “dynamic and up-and-coming with a Geoff Allez
great international focus”, according to a rival Simon Howitt
partner. “They’re knocking on the door of tier Andrew Laws
The firm has grown again this year,
appointing seven associates including senior Other notable ﬁrms
associate Caroline Chan from Ozannes’ Mourant opened its Guernsey office in
Guernsey ofﬁce. The ﬁrm has moved to new January 2006 and has made an impressive
premises to accommodate its expected growth. entrance to the market. Headed by Darren
Partner Marcus Leese is described by a rival Bacon, the ﬁrm hired John Lewis from Collas
ﬁrm as “a complete workaholic who keeps Day in June 2007 and focuses on the funds
clients happy”, while a client describes partner and ﬁnance business.
Roger Le Tissier as having a “good practical Among Mourant’s highlights, the firm
approach”. acted on the formation of Volta Finance’s
Ogier had a very busy year on the corporate closed-ended fund and its subsequent listing
front. One highlight was winning a role as on Euronext, provided Guernsey guidance for
Guernsey legal advisor for the vendor in BNP private-equity group Doughty Hanson and
Paribas’s £30 billion acquisition of RBS Carlyle’s launch of a range of permanent cap-
International Securities. Another deal saw the ital vehicles, and provided cross-jurisdictional
ﬁrm act as Guernsey advisor to Citigroup on its advice to the Royal Bank of Scotland on the
purchase of Quilter Holdings, the British £572 million Epic (Barchester) commercial
wealth management arm of Morgan Stanley. mortgage-backed security issue.
The ﬁrm advised Macquarie Bank on the Other signiﬁcant clients include Abbey
formation on a Guernsey-based joint venture National, HSH Nordbank, Allied Irish Bank,
vehicle in its £8 billion purchase of Thames Eurohypo and Citibank.
Water, and provided guidance on a £450 mil- Bedell Cristin is also a new entrant to the
lion reﬁnancing of the bank facilities of two market, opening its doors in April 2007 with
cells within Dominion Funding Limited. ex-Babbé partner Mark Helyar.
On the ﬁnancial side, one highlight saw Helyar was followed in May 2007 by
Ogier provide Guernsey advice on Tetragon Ozannes senior associate Christopher
Financial Group’s $1 billion listing on the Anderson, who promoted to partnership.
Euronext exchange in the Netherlands. Peers predict the ﬁrm will accelerate up the
Ogier also acted as the Guernsey adviser rankings within the next few years if it can
during the formation of a number of closed- continue to attract talent.
ended funds, including the Coller On the deal front, Bedell’s highlight for
International Partners V Fund, EQT V Fund the year was working on the ﬁrst conversion
and Cazenove Absolute Equity. of a mutual fund from a protected to an incor-
Other noteworthy transactions saw Ogier porated cell company for a subsidiary of First
provide guidance on the establishment of cells Rand.
within AHL Strategies and advise on a $440 “They have the backup of a strong practice
million share issue by Dexion Capital. in Jersey, so watch this space,” said one lawyer.
Roger Le Tissier
Formerly known as Babbé Le Pelley Tostevin,
the ﬁrm has hired former banking and asset
ﬁnance group partner Stuart Tyler from
London ﬁrm Stephenson Harwood but the
shadow of Mark Helyar’s departure still hangs
over the ﬁrm.
Noted by a peer for its abilities in interna-
tional domestic ﬁnancial work, Babbé repre-
sented the purchasers in the £63 million sale of
Trafalgar Court, Guernsey’s largest-ever proper-
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