Private Equity Funds in Guernsey – Fund Management/ REITs


Guernsey Private Equity Fund (FIP) recognizes that for some promoters, the nature of target investors warrants a more flexible, cost-effective and timely approach to fund regulation and launch, in line with the Private Equity Funds Rules and Guidance, 2021 (FIP Rules).

It’s popular with both new promoters looking to launch their first fund and existing managers looking to deliver a simple product to investors very quickly.

A PIF and, if applicable, its associated management entity can be registered (and approved) by the Guernsey Financial Services Commission within one working day. The application consists of a single form for fund registration and manager approval (when required by the fund). This provides promoters with a very flexible regulatory environment to allow for innovation and expansion.

Depending on the “route” you select under the PIF regime (see PIF routes below), in the application, the manager and/or administrator must make certain representations to the Commission, which allows for an expedited regulatory review and approval process.

Main characteristics

Regulation: a PIF must be a collective investment scheme under the Protection of Investors (Bailliage of Guernsey) Act 2021 (POI law) and be registered with the Commission under the POI Act. PIFs are subject to the PIF Rules, which can be found on the Commission’s website.

Open or closed: a PIF can be either an open fund or a closed fund.

Flexible form: FIPs may be incorporated as corporations, unit trusts, limited partnerships or any other vehicle or entity that may be approved by the Commission.

Administrator: where the PIF is a licensed POI manager PIF (see PIF routes below), the manager must be licensed and domiciled in Guernsey and be responsible for the investment management of the fund as a whole. However, the Rules and Guidelines for Licensees (Conduct of Business) 2021 and the Rules and Guidelines for Licensees (Capital Adequacy) 2021 do not apply to an FRP Manager.

Investors: a PIF can have a maximum of 50 investors. Other investor provisions apply depending on the selected Route (see PIF routes below).

Documents: there is no regulatory obligation to produce an information document, prospectus or similar. The only document submitted to the Commission is the relevant PIF form, although the manager may wish to prepare a document outlining the conditions and risks of the investments for investors.

Administration: an administrator domiciled and approved in Guernsey must administer the PIF.

Listener: a FIP must be audited by a qualified auditor.

Guardian: A depositary is only required for open-ended funds and the Commission will consider the appointment of a depositary or a prime broker domiciled outside Guernsey.

Costs: the Commission collects fees for the registration of FIPs as follows:

  • Itinerary 1: Application fee of £6,050 and annual fee of £5,325.

  • Routes 2 and 3: Application fee of £3,500 and annual fee of £3,500.

If the PIF is an umbrella system or has multiple classes of shares, additional fees will be charged.

PIF routes

There are three “paths” to becoming a PIF:

Route 1 – PIF Licensed POI Manager

To proceed according to route 1, the FIP must be managed by an authorized manager. This license is provided to the manager as part of the PIF registration process. Once authorised, the PIF manager can carry out management activities, but only in relation to the PIF.

In addition to the 50 investor limit, a POI Licensed Manager PIF must be limited to no more than 30 new investors added during each 12 month period the PIF is registered.

Route 2 – Qualifying Private Investor FIP

To proceed under Track 2, FIP investors must meet the qualification criteria consistent with the definition of an “accredited investor” under the current accredited investor fund regime. In addition, all investors must meet the definition of a qualified private investor, being an investor who is both able to:

  • assess the risks and investment strategy in the FIP; and

  • bear the consequences of investing in the PIF, including the possibility of any loss arising from the investment.

Route 3 – PIF Family Relationship

To proceed under Route 3, investors must all share a “family relationship” or an investor must be an “eligible employee” of the investors family. For these purposes, a qualifying employee is a person who meets the definition of a qualifying private investor (as per Route 2).

The new PIF regime does not define a “family relationship” and therefore a common sense interpretation of being related to each other by blood or marriage. The administrator of a family relations PIF is required to report to the GFSC that it has procedures in place to ensure that investors are qualified to invest in the PIF, so it will be up to the administrator to demonstrate due diligence and being comfortable with family investor relations.

Selecting the correct route for your PIF is of great importance to ensure you have the best structure to meet your needs.

Collas Crill’s Corporate, Finance and Funds team will be happy to discuss your needs and select the PIF path that is right for you.

Main features of PIF routes – at a glance

The table below provides a comparison of the three routes, highlighting the key features of each.
































Main characteristics

Route 1 POI Licensed Manager PIF

Route 2 eligible private investor PIF

Route 3 Family Relationship PIF

GFSC Application Processing Time

One day

One day

One day

Maximum number of legal entities/natural persons invested

50

50

50

Number of investors allowed to be admitted over a 12 month period

30 (if open)

No restriction

No restriction

Marketing restrictions

None

Can market to no more than 200 potential investors

Can only sell to family group

Requires an information document

Nope

Nope

Nope

Can be open or closed

Yes

Yes

Yes

Obligation to be audited

Yes

Yes

Yes

Requires Guernsey Licensed Handler

Yes

Nope

Nope

Manager acting as an agent considered as an investor

Nope

No (if named)

No (if named)

Manager acting as an agent considered as an investor

Yes

No (if named)

No (if named)

Requires a statement that investors have the capacity to bear an investment loss

Yes

Nope

Nope

Restricted to professional investors, experienced investors and knowledgeable employees

Nope

Yes

Nope

Reserved for investors sharing a family relationship or an eligible family employee

Nope

Nope

Yes

Declaration of the administrator required

That the PIF manager is fit and suitable

That effective procedures are in place to ensure that the FIP is limited to appropriate private investors

That effective procedures are in place to ensure that all investors meet the family requirement

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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