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CONTACT - Guernsey Chamber of Commerce

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said Stuart phillips, director at<br />

pKF and GreeFF chairman.<br />

He brings working relevance to<br />

the GreeFF chair as he worked<br />

in neighbouring Kazakhstan for<br />

one <strong>of</strong> the major accountancy<br />

firms for a number <strong>of</strong> years in<br />

the late 1990s and then in russia<br />

for five years before moving to<br />

<strong>Guernsey</strong> at the end <strong>of</strong> 2007.<br />

the establishment <strong>of</strong> this group<br />

coincides with russia-based fund<br />

managers and banks seeking to<br />

attract investment from abroad.<br />

‘there are many large reputable<br />

names in russia, and they are<br />

keen to work with well-regarded<br />

financial centres such as <strong>Guernsey</strong>,<br />

to help tackle this perception <strong>of</strong><br />

corruption and help allay some<br />

<strong>of</strong> the nervousness investors<br />

feel,’ said Michel Davy, managing<br />

director <strong>of</strong> ipes <strong>Guernsey</strong> and<br />

a member <strong>of</strong> GreeFF.<br />

a qualified chartered certified<br />

accountant, he has worked with<br />

clients across the private equity asset<br />

class and has been instrumental in<br />

building ipes’s russian client base.<br />

Many financial service providers<br />

in <strong>Guernsey</strong> have been working in<br />

russia throughout these turbulent<br />

years, building up an impressive<br />

list <strong>of</strong> well-established and wellregulated<br />

client contacts including<br />

Baring Vostok (see case study),<br />

VtB capital (the investment arm<br />

<strong>of</strong> one <strong>of</strong> russia’s largest banks)<br />

and raven russia, leading to a<br />

number <strong>of</strong> success stories.<br />

‘<strong>Guernsey</strong> has some historical<br />

business with russia going back<br />

to the start <strong>of</strong> private equity<br />

houses using <strong>Guernsey</strong> for fund<br />

structures. We are now seeing a<br />

resurgence in interest spanning<br />

different asset classes,’ said andrew<br />

Boyce a partner in the corporate<br />

and finance group <strong>of</strong> carey olsen<br />

and also a member <strong>of</strong> GreeFF.<br />

The Russian opportunity<br />

there has been much talk <strong>of</strong> an<br />

emerging markets-led recovery and<br />

one trend that the firms within<br />

GreeFF have seen is a real growth in<br />

interest from both european and<br />

russian fund managers seeking to<br />

raise funds with european money for<br />

inward investment into russia.<br />

indeed, as the country emerges<br />

from the downturn with Q2 GDp<br />

up 5.4% and the russian economy<br />

expected to expand by 4% this<br />

year (vs. a decline <strong>of</strong> 7.9% in<br />

2009), opportunities in russia<br />

look set to grow even further.<br />

For its part, russia has never<br />

shirked from aiming high – the<br />

Kremlin has long-term plans<br />

to turn the rouble into a global<br />

reserve currency. earlier this<br />

year president Medvedev himself<br />

appointed one <strong>of</strong> the country’s most<br />

‘For its part, Russia has<br />

never shirked from aiming<br />

high – the Kremlin has<br />

long-term plans to turn<br />

the Rouble into a global<br />

reserve currency.’<br />

powerful politicians to spearhead<br />

the Kremlin’s latest push to turn<br />

Moscow into an international<br />

financial centre, a slightly less l<strong>of</strong>ty<br />

ambition but one likely to clash with<br />

the old perceptions and embryonic<br />

state <strong>of</strong> russia’s regulatory system.<br />

the global economic crisis has<br />

identified that russia is not selfsufficient<br />

in its ability to raise<br />

capital and that it urgently needed to<br />

improve its financial regulations and<br />

corporate governance in order to alter<br />

its global financial image and bolster<br />

investor confidence. For example,<br />

foreign shares still cannot be listed<br />

on the russian stock exchange<br />

and there is no law against insider<br />

trading. While very few would<br />

say that these goals are achievable<br />

in the immediate short-term, the<br />

open acknowledgement <strong>of</strong> this<br />

ambition is the first step in driving<br />

the necessary structural reforms.<br />

indeed, since the crisis, there is<br />

evidence <strong>of</strong> russia moving away from<br />

relying purely on exports <strong>of</strong> natural<br />

resources (oil, minerals, agriculture,<br />

etc) to drive the economy, with<br />

prime Minister Vladimir putin<br />

actively seeking to attract foreign<br />

investors to drive future growth.<br />

the recent Financial times<br />

special report investing in<br />

russia confirms the extent <strong>of</strong><br />

opportunities which exist in the<br />

country, noting that senior ➜<br />

www.guernseychamber.com | OCTOBER/NOVEMBER 2010 | <strong>CONTACT</strong> | 21

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