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CONTACT - Guernsey Chamber of Commerce

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ussia strives to be a mainstream<br />

investment destination, it will seek<br />

and comply with the regulations<br />

<strong>of</strong> the well established financial<br />

centres,’ said advocate Boyce.<br />

‘the challenge in bringing<br />

business to the island is two-fold.<br />

Fund managers need to be able and<br />

willing to provide the information<br />

needed to satisfy <strong>Guernsey</strong>’s robust<br />

regulatory requirements and equally,<br />

as a jurisdiction, we need to be able<br />

to adapt to the needs <strong>of</strong> russianbased<br />

funds without compromising<br />

our regulatory integrity.’<br />

Mr Bernstein agrees that reputation<br />

is important for investors and that<br />

<strong>Guernsey</strong> has a reputation as a<br />

jurisdiction that takes compliance and<br />

anti-money laundering very seriously.<br />

this is particularly important<br />

for funds looking to attract<br />

foreign investors as they prefer<br />

the association with <strong>Guernsey</strong>,<br />

since it helps to overcome the<br />

nervousness <strong>of</strong>ten associated<br />

with russian investments.<br />

‘to be successful in taking<br />

advantage <strong>of</strong> the opportunities<br />

available we need to make sure that<br />

we get the <strong>Guernsey</strong> brand known<br />

and understood and this includes<br />

reinforcing the message that the<br />

island <strong>of</strong>fers good governance and<br />

robust yet pragmatic regulation.<br />

<strong>Guernsey</strong> Finance is focussed on<br />

raising awareness <strong>of</strong> the island<br />

and its strong reputation while at<br />

the same time facilitating business<br />

opportunities for the rest <strong>of</strong> the<br />

team who we are working with very<br />

closely,’ said peter Niven, chief<br />

executive <strong>of</strong> <strong>Guernsey</strong> Finance.<br />

The threat – or is it just propaganda?<br />

there is much talk these days about<br />

the eU aiFM directive and the impact<br />

which it might have on <strong>Guernsey</strong> and<br />

other <strong>of</strong>fshore jurisdictions. there is<br />

no question that jurisdictions within<br />

the eU are ramping up their<br />

marketing campaigns - notably<br />

ireland and luxembourg are<br />

promoting themselves as the next<br />

jurisdiction for investment business.<br />

like <strong>Guernsey</strong>, they are targeting<br />

russia and we have seen a russian<br />

prospect fall away from our <strong>Guernsey</strong><br />

pipeline as a result, it seems, <strong>of</strong><br />

extensive relationships between the<br />

respective russian and luxembourg<br />

ambassadors. the lobbying is at the<br />

highest level it seems,’ said Mr Davy.<br />

Mr phillips said that the external<br />

competition proves the need to be<br />

proactive to ensure <strong>Guernsey</strong> meets<br />

the needs <strong>of</strong> investment managers<br />

going forward and that this would<br />

be on <strong>of</strong> the key aims <strong>of</strong> GreeFF.<br />

‘<strong>Guernsey</strong> has a very strong <strong>of</strong>fering<br />

and i am confident that the island will<br />

continue to benefit from the growth <strong>of</strong><br />

the russian economy. We are hoping<br />

to work with <strong>Guernsey</strong> Finance to<br />

take a delegation to russia next year,<br />

Case Study: Baring Vostok Capital Partners<br />

Baring Vostok capital partners is one<br />

<strong>of</strong> the leading private equity houses<br />

operating in russia and the ciS. the<br />

Baring Vostok private equity Funds<br />

have invested over $1.2 billion in 54<br />

companies since 1994, and currently<br />

have committed capital <strong>of</strong> $2 billion<br />

for new investment.<br />

the Funds’ portfolios are diversified<br />

among financial services, oil and gas,<br />

consumer products,<br />

telecommunications, and media.<br />

Since 2005, for five years in a row,<br />

Baring Vostok capital partners has<br />

been voted ‘russian private equity<br />

Firm <strong>of</strong> the Year’ by readers <strong>of</strong> private<br />

equity online and private equity<br />

international in their annual Global<br />

private equity awards.<br />

During a recent interview with<br />

David Bernstein, Director <strong>of</strong> investor<br />

relations at Baring Vostok, a number <strong>of</strong><br />

subjects were discussed including on<br />

why russia is showing signs <strong>of</strong> greater<br />

activity than other jurisdictions;<br />

“its down to opportunity” said<br />

Bernstein “organised private equity is<br />

still relatively under-developed in<br />

with the aim <strong>of</strong> expanding our contact<br />

base and developing a number <strong>of</strong><br />

new opportunities. russia looks<br />

set to continue to grow, and we’re<br />

certainly bullish about the Bear.’<br />

GreeFF can be contacted at<br />

guernseyrussianforum@yahoo.<br />

co.uk or search for <strong>Guernsey</strong><br />

russian Forum on linkedin.<br />

russia and there are only a small<br />

number <strong>of</strong> private equity Funds with<br />

institutional investors. Hence new<br />

fund managers are trying to set up or<br />

spin out”.<br />

“at a macro level, there are some<br />

foreign strategic investors who<br />

understand that there is plenty <strong>of</strong><br />

opportunity in russia, which <strong>of</strong>fers<br />

higher growth, richer margins and less<br />

competition than their home markets.<br />

once investors can get over the initial<br />

fear <strong>of</strong> investing in russia then they<br />

can open themselves up to the smart,<br />

energised business entrepreneurs that<br />

can create wealth for them”.<br />

“We believe russia is in the middle<br />

<strong>of</strong> a 30-40 year transition from a<br />

completely state-controlled economy<br />

to one that resembles an open, market<br />

economy. there are new market<br />

segments and growth opportunities<br />

which make it ideal for investment”.<br />

“We chose <strong>Guernsey</strong> because <strong>of</strong> its<br />

reputation for compliance and due to<br />

our high level <strong>of</strong> satisfaction with our<br />

service providers there.<br />

www.guernseychamber.com | OCTOBER/NOVEMBER 2010 | <strong>CONTACT</strong> | 23

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