Why are Guernsey funds attractive to renewable energy investments?

Renewable Energy Sector: A Snapshot

Renewable energy is an industry that is definitely here for the long-term. Everyone is aware of the drastic need to move to alternative sources of energy and the positive impact this will also have on the environment.

The five primary sources of renewable energy are:

• Solar energy
• Wind energy
• Geothermal energy from heat inside the earth
• Biomass derived from plants
• Hydropower from flowing water

Economic Impact

Besides renewable energy’s positive effect on the climate, it is also making a significant impact on the economy, with the sector sees a surge in many major new start-ups and expanding corporates. Therefore, substantial investment is being allocated into this sector by both institutional and private investors.

Impact on Dixcart Guernsey

The Dixcart Guernsey office has a number of clients who operate in this flourishing sector. Clients vary from unregulated corporate structures for Private Equity or Private Clients to manage their own investments, to licenced funds with specific interest in using the Private Investment Fund which is the focus of this article.

Why is Guernsey an Attractive Jurisdiction for Such a Fund?

Guernsey is a leading domicile for funds, with more than 50 years of experience in the formation, administration, and cross-border distribution of investment funds.  This therefore provides an excellent platform to Promoters to raise funds, as Guernsey is a jurisdiction investors (particularly institutional) are comfortable with.

For newer or start up Promoters, the Private Investment Fund (PIF) Regime offers a particularly appealing option with its ‘lighter touch’ approach. This is enabled as the Guernsey Regulator places reliance on the licensed Administrator to monitor the PIF’s activities and adherence to the PIF Regime and other rules.

A key point to note for a PIF is there cannot be more than 50 investors.  Further details on the three types of PIFs and specific key criteria to each type can be found by clicking: Manager PIF; Qualified Investor PIF; and, the Family PIF.

Why are Private Investment Fund structures of so much Interest?

The key reasons for the increased interest in PIFs are:

• Speed to market – Once the Designated Administrators have completed their fit & proper and other checks, there is a one business day turnaround by the Regulator for PIF application approval;
• Lighter Touch Regulation – As advised above, this is due to the Guernsey regulator relying on the Designated Administrator’s close monitoring role of the PIF;
• No requirement for private placement memorandum (PPM) or other information particulars, although it is common for a PPM style document to be provided to potential investors;
• Flexibility in being closed-ended or open-ended;
• Still a fully recognised collective investment scheme;
• Listing opportunities – Guernsey entities having the highest number of London Stock Exchange listings after the UK;
• World leading support network of professional advisors based in Guernsey; and
• Guernsey’s tax neutral status for collective investment schemes.

Additional Information

For further information on the establishment and administration of a private investment fund (or unregulated corporate structures) and their relevance to corporates operating in the renewable energy sector, please contact Steven de Jersey at advice.guernsey@dixcart.com

Further reading:

• Resolving Africa's energy disputes in Ethiopia
• Keeping a finger on North Africa's energy pulse
• Gearing up for the renewable energy push

About Dixcart Trust Corporation Ltd:

Dixcart Trust Corporation Limited is a member of the Dixcart Group, AGA's provider of international business support services. Dixcart has been providing professional expertise to individuals and their families for over fifty years. Professional services include structuring and the establishment and management of companies. The team in Guernsey can assist companies and individuals to trade and invest efficiently using appropriate structures across the world.