GLOBAL BUSINESS: A VIEW FROM THE CHANNEL ISLANDS
BUSINESSLIFE
BUSINESSLIFE
MIDDLE EAST EDITION 2021
the new face of wealth women and next gen take the reins
MIDDLE EAST EDITION 2021
• succession strategies • esg investing • expats • bilateral investment treaties • digital evolution
Welcome
Adapting to a new world THE MIDDLE EAST, like many regions around the world at present, finds itself in the midst of a shifting wealth and investor demographic. However, as a region where finances, investment and wealth have historically been managed in line with a single approach, controlled by senior, male family figures – and with relatively strict guiding principles – the challenges it faces in adapting and evolving to meet the demands of the new world are considerable. In that new world, young people are increasingly likely to be involved in wealth management decisions. Women are becoming far more prevalent in investment and wealth decisions, too. It’s estimated that they are adding $5trn to the global wealth pool every year – outpacing the growth of the wealth market overall. And St James’s Place notes that the wealth held by women globally is expected to grow to $93trn by 2023, up from $77trn in early 2020. Alongside this demographic change, there is growing demand in the Middle East to tailor succession planning to individual needs, rather than simply following the age-old path. The Middle East, as with many regions, is changing. And the jurisdiction’s wealth and investment sector must adapt to meet the new expectations that change is creating. In this special Middle East edition of Businesslife, we explore many of those changing demands – and examine how Channel Islands businesses are supporting the region’s evolution by providing new and alternative financial services, products and solutions.
STRONG, SUPPORTIVE RELATIONSHIP We speak to the heads of Jersey Finance and Guernsey Finance – two bodies working hard to build relations between the Channel Islands and the Middle East – and hear that there is already a strong relationship in place. Jersey Finance CEO Joe Moynihan tells us that officials from Jersey have been visiting the region for the past two decades and there has long been demand for Jersey-based businesses for a variety of reasons. “Our reputation, the high-quality regulation we have and the expertise across the board are the most important factors,” he says. “If you look at Jersey as a jurisdiction, the vast majority of people working in the industry are professionally qualified. There’s a strength you get right across the sector – goodquality law firms, good-quality accounting firms, world-class banks, world-class service
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providers on the family office and the corporate wealth side. “The financial services ecosystem – the infrastructure – we have is second to none. And we also have a supportive, strong regulator.” Rupert Pleasant, Moynihan’s Guernsey counterpart, tells us his organisation has long been building similar links in the region, including ground-breaking work around green investment opportunities, and that further opportunities to partner lie ahead. “We see the region as having great potential, with substantial capital flows coming from the GCC region in recent years,” he says. “There’s particular interest in responsible investing in ESG strategies for bespoke structures. “We also recognise the changing demographics within the Middle East. We have recently released research that looks at women in family offices, with a specific focus on the role of women in Middle Eastern family offices. “It found that women in the Middle East are playing an increasingly important role in wealth management and decision-making, managing more than $800m in assets in the Gulf region.”
WHAT WOMEN WANT That emergence of women as key wealth players is explored in detail in our feature starting on page 38. It sets out how female investors’ preferences and habits differ from their male counterparts – they seek a more holistic view of the investment landscape and are more risk-averse. The article also sets out how they expect to engage with wealth and investment managers, and how Channel Islands firms can help deliver on their expectations, given their own history of serving female wealth holders. In this special Middle East issue, we also explore other ways in which Middle Eastern investors and investment managers are calling on Channel Islands firms for their expertise and guidance – from aligning ESG principles with Shariah rules, to strategies for succession planning, to the rise of technology in the Middle Eastern market. I hope you enjoy the issue. n
There is growing demand to tailor succession planning to individual needs rather than simply following the age-old path
Jon Watkins is Editor-in-Chief of Businesslife
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Contents
INSIDE
BL
8 COMMENT
BUSINESSLIFE
Businesslife is published quarterly by Chameleon Group, with special editions covering the City, Middle East and Asia +44 1534 615886 www.blglobal.co.uk
20 6 News
20 trade agreements
38 female investing
Recent developments in Jersey and Guernsey
A Bilateral Investment Treaty (BIT) between Jersey and the United Arab Emirates promises to boost investment on the island
As women’s impact on the world of wealth grows, wealth managers must prepare for a different approach to investing and money management
CEO, CHAMELEON GROUP Carl Methven carl.methven@blglobal.co.uk EDITOR-IN-CHIEF Jon Watkins ART DIRECTOR Angela Lyons SUB EDITOR Kate Wheal ADVERTISING sales@blglobal.co.uk
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10 interview Channel Islands finance leaders Joe Moynihan and Rupert Pleasant discuss the potential for even greater collaboration between the Middle East and the Channel Islands
NEWS AND EDITORIAL news@blglobal.co.uk GENERAL ENQUIRIES enquiries@blglobal.co.uk
26 wealth planning Why wealthy Middle Eastern families are increasingly looking to the Channel Islands for structuring and succession strategies
34 expat investing Despite a complex regulatory environment, Channel Islands specialists are helping Middle East-based expats to set up sustainable investment portfolios
Christopher Dungan, Regional Director, Middle East, for Fiduchi (DMCC Branch), on the values that connect the Middle East and Jersey
44 ethical investing ESG priorities can easily be aligned with Shariah principles – and Channel Islands businesses are on hand to help
50 digitalisation Can traditionally run Middle Eastern family offices seize the opportunities posed by digitalisation?
58
key data The big numbers from the Middle East marketplace
contributors The BL Global Discussion Forum
DAVID CRAIK
Follow us @blglobalnews Office: 7 Castle Street, St Helier, Jersey, JE2 3BT © Chameleon Group Limited, all rights reserved. Reproduction in whole or in part without written permission is prohibited. Views expressed by our contributors are their own and do not necessarily represent the views or policies of Chameleon Group. While every effort is made to achieve total accuracy, Chameleon Group cannot be held responsible for any errors or omissions.
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David explores how building its own post-Brexit bilateral trade agreements is helping Jersey grow its influence in the Middle East and increasing access to services on the island.
MARCO DE NOVELLIS
Marco looks at how Channel Islands firms are helping Middle East investors align their desire for environmental, social and governance credibility with Shariah principles.
SOPHIE McCARTHY With the great wealth transfer moving the control of much of the region’s money into the hands of women, Sophie paints a picture of what women want from their advisers and managers.
ALEXANDER GARRETT
Amid the rapid advance of digital technologies, Alex takes a look at how traditionally run Middle Eastern families can adapt to seize the opportunities that are on offer.
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in the NEWS FUND GOVERNANCE CHALLENGE The rise of ESG investing, demands for specific experience, and greater expectations on transparency are all shaping the fund governance landscape – but there is still a way to go for managers and boards to align with the governance objectives of investors, according to new research by IFI Global and supported by Jersey Finance. The report – Funds Governance in 2021: What it Means to Investors – explores how approaches to fund governance are shifting among international investors in a post-pandemic ESG era. Based on the views of investors and their advisers in North America, Europe, Asia Pacific and the Middle East, the research was carried out between April and June. It found: • 54% of investors believe ESG issues will have an impact on fund governance • 84% said they thought governance was helpful but not that important • 8% viewed fund governance as very important; the same number said it was not important • All respondents felt the purpose of fund governance was to protect the interests of investors, rather than to serve the interests of the fund • Investors wanted directors of the funds they invest in to be experienced and independent • 85% of respondents wanted term limits for directors • 81% said they would like to see more transparency in fund governance, including in selecting directors.
hedge, real estate, infrastructure and debt funds, now account for 89% of all funds business in Jersey. In addition, the number of registered Jersey Private Funds grew by more than 50 over the period to reach 456 (up 13%). The figures also show that deposits held in Jersey banking institutions midway through 2021 stood at £127.2bn, down 8% on December 2020. This was influenced by currency movements and global market volatility, with 53% of deposits in Jersey held in foreign currencies. Corporate activity remained strong over the six months, with 722 company incorporations in the latest quarter and the total number of live companies on the register standing at the highest level for more than a decade – 33,948. Jersey Finance Deputy CEO Amy Bryant (pictured) said: “These figures reinforce some important points. First, the fact that corporate activity has remained strong, and our banking sector has been resilient underlines the robust nature of our industry. “Also the fact that our investment funds sector has shown sustained growth highlights our strengths as a centre focused on putting high-quality institutional and private capital to work around the world.”
JERSEY PUBLISHES MID-YEAR FUND DATA The latest quarterly figures for Jersey’s finance sector, collated by the Jersey Financial Services Commission and published by Jersey Finance for the period ending 30 June 2021, show that the value of total funds business booked in Jersey grew by 15% over the first half of 2021. The figures show that funds sector performance has been driven by private equity, which has grown by 24% over the half year to £203.6bn. Combined, the alternative asset classes, including private equity, venture capital,
GUERNSEY REPORTS ON FIDUCIARY DUTIES We Are Guernsey has published Fiduciary Duty in the 21st Century, highlighting the approach of Guernsey practitioners towards ESG principles and fiduciary duty. The report showcases the importance of modernising fiduciary duty across the globe, and the ways in which Guernsey, as a centre of green and sustainable finance, has been working to do so. These include the construction of institutional frameworks, the development of appropriate fiduciary products and services and aligning key stakeholders with climate finance.
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As well as discussing the island’s strategies, the report explores perceived barriers to the adoption of an ESG investment strategy in the context of the legal framework for fiduciary duty. GUERNSEY FUNDS VALUE HITS NEW HIGH The net asset value of funds domiciled in Guernsey is at its highest ever level following a 20% increase over a year, according to the Guernsey Financial Services Commission. The NAV increased in sterling terms by £9bn over the quarter, and by £45.8bn between the end of Q2 2020 and the end of Q2 this year. The figure has increased every quarter since the end of March 2020. The latest statistics also show that the number of funds designated Guernsey Green Fund status has hit double figures – there were 11 with a NAV of £3.9bn at the end of June 2021, and the GFSC has confirmed the total is now up to 14. ESG AND FAMILY OFFICE REPORT A report exploring how sustainability, ESG priorities and effective governance are playing out in the ultra-high-net-worth space has been published by Wealthbriefing, supported by Jersey Finance. Virtuous Circles: Sustainable Family Governance Models in an Evolving Environment, based on a global survey of practitioners and family office specialists, highlights emerging best practice in the ESG and governance space. It also sets out examples of what forward-thinking families are doing to create lasting legacies. The report underlines the focus on developing robust approaches to governance and reveals how enterprising families are increasingly aware the management of their businesses, investment strategies and interpersonal relations are intertwined: • 61% of advisers said enterprising families should have a formal governance programme in place by the time they have £50m in assets • 74% said a business succession plan was vital as part of a family governance programme, then internal communications policy (63%) and a family council (61%) • 62% think families are unsure how to proceed with succession planning • 68% of advisers believe philanthropy and impact investing objectives will become increasingly intertwined. n
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BL BY NUMBERS
News
$800M
Assets now under management by women in the Gulf region – a symbol of the seismic demographic shift taking place in the Middle East
“It is estimated that more than 80% of nonoil domestic product in the Gulf is generated by family businesses – yet there is a sentiment that only 4% of Middle Eastern family-owned businesses will survive to the fourth generation” Why Middle East families are stepping up their succession planning
“THE UAE IS A VERY IMPORTANT TRADE PARTNER. IT IS A GROWING MARKET AND RIPE FOR A DEEPENING OF THE RELATIONSHIP WITH JERSEY”
PAGE 26
PAGE 20
In Qatar, just 15% of the population comprises domestic nationals – and the story is similar in Kuwait, where 70% of inhabitants are from overseas How to service the expat community
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Jersey is striving to seal a Bilateral Investment Treaty with the United Arab Emirates
46%
“The financial services ecosystem – the infrastructure – we have is second to none. And we also have a supportive, strong regulator” Jersey Finance CEO Joe Moynihan on the appeal of the Channel Islands to Middle Eastern partners “The promotion of green finance and investment in sustainable projects is a key growth sector globally and this trend isn’t bypassing the Middle East” Guernsey Finance CEO Rupert Pleasant on how Guernsey is helping meet demand for green products in the Middle East
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The proportion of Middle Eastern CEOs who say they intend to increase ESG investments over the next three years
Aligning ESG and Shariah principles PAGE 44
$5TRN
THE AMOUNT THAT WOMEN ARE ADDING TO THE WEALTH POOL GLOBALLY EVERY YEAR – OUTPACING THE GROWTH OF THE WEALTH MARKET OVERALL HOW TO MEET THE DESIRES OF FEMALE INVESTORS PAGE 38 mIdDLE EAST EDITION 2021 7
An alignment of values
CO MME N T
nuances of Middle Eastern culture and religion are catered for in established structures. Ethical, religion-compliant family structures are backed up by a high level of regulation and a solid legal system, ensuring the security of a family’s assets and proving that, just like the people, the systems work better together.
CHRISTOPHER DUNGAN Regional Director – Middle East, Fiduchi (DMCC Branch)
A
t first glance, the contrast couldn’t be much starker: the gleaming skyscrapers, scorched land and wide highways versus the medieval splendour of castles atop a cliff face in the English Channel, blurred by winter’s horizontal rain. Look closer though and you will find that Jersey and the modern Middle East are not so different. And this paradox goes some way to explaining the links between the two jurisdictions. The usual soundbites justify Jersey’s position as the international finance centre of choice for those in the Gulf Cooperation Council (GCC – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates) and broader Middle East. Its geographic position between Asia and the Americas, and its proximity to the UK, where many have ties from the Middle East, means it’s a logical choice. But there’s more than that. This bridge is built on common values, which have allowed the relationship to flourish. There is a mutual interest in each other’s success, pride and a desire to improve the world. BETTER TOGETHER There has been a recognition in the Middle East for some time that there is a great deal of value in looking outside one’s own borders to ensure a better future for one’s family and the wider nation. For decades, much of that has meant using jurisdictions such as Jersey to help structure assets for large families in the Middle East, make efficiencies, ensure smooth succession planning and asset protection, whether this is for their businesses, properties abroad, investments, yachts or aircraft. As this relationship has developed, it has been collaborative, not combative. Indeed, the worry that Jersey may wish to impose its will and way of working upon the outside is a real sentiment for some individuals considering using the jurisdiction. Soon, however, they realise that this is not at all the case. In fact, the trust and corporate services providers in Jersey can adapt to ensure the subtle
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ALWAYS IMPROVING The ability to adapt is not simply a matter of being better together for the sake of appeasing one another; it is about improving and paving the way for the future. In the relationship between the Middle East and Jersey, much of this work is instigated by governments and financial regulators. Even before Jersey Finance established a physical presence in the region, the Dubai Financial Services Authority and the Jersey Financial Services Commission signed a Memorandum of Understanding in 2006 – now Jersey Finance’s regional representative office is based in the Dubai International Financial Centre. And just over two years ago, Digital Jersey and the Bahrain Economic Development Board signed a digital innovation agreement. All of this has resulted in the capability to develop specific services within Jersey for clients from the Middle East. Those clients are not just family offices and high-net-worth individuals. Large governmentrelated entities and financial institutions in the Arab world also use Jersey as a springboard to the global marketplace. Many sovereign wealth funds in the GCC use Jersey special-purpose vehicles to invest for the future of their nations. International Savings Plan legislation was developed in Jersey specifically with the UAE in mind, as it moves away from a defined benefit employee savings plan for the large expatriate population. Fund managers across the Middle East are now familiar with the Jersey Private Fund offering, which is an excellent fit for a region where one ordinarily finds a small number of highly qualified investors looking for exciting investment opportunities to invest in a syndicate. A BRIDGE TO THE FUTURE Working together for mutual benefit is a recipe for success. This does not come without effort: both sides need to remain committed to each other. As trust and confidence in Jersey as an international finance centre has been built, clients from the Middle East will continue to use the jurisdiction, but Jersey must do its bit too. Maintaining high levels of service and legal security is important, but so too is listening, continuing to adapt and improve. Following the visit of Jersey’s Chief Minister to the UAE in October this year, this will surely continue. n
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Jersey: Increasingly Diverse Connections with the
Middle East
Based on its world-class reputation for integrity, independence and stability, Jersey has earned a formidable reputation as a partner international finance center (IFC) in the Middle East, supporting the needs of individuals, families and businesses with a broad range of cross-border investment, wealth management and succession planning activity. The Middle East remains a vital market for Jersey, which established an office in the UAE in 2011 and became the first IFC to be granted a license in the Dubai IFC in 2018.
An Kelles Director, GCC Jersey Finance
Faizal Bhana Director, Middle East, Africa and India Jersey Finance
Today, Jersey’s relationship with the region continues to evolve as investors explore increasingly diverse and sophisticated ways to protect and invest their capital. In particular, Jersey has become a go-to centre for alternative fund structuring within the European time-zone – Jersey administers more than US$500 billion of fund assets, 90% of which are in the alternatives space. A number of high-profile funds with Middle East investors have launched through Jersey in recent months, attracted by its regulatory regime and superior experience. The launch this year of Jersey Finance’s sustainable finance strategy, combined with Jersey’s Islamic Finance experience, is also bolstering its reputation for ESG investing. The increasing convergence of the objectives of Shariah-compliant financing and ESG investments means that Jersey is well placed to provide experience in both these areas. Finally, with the next generation of investors set to assume control of around US$1 trillion of wealth over the coming decade, the forwardthinking approach Jersey has adopted in terms of succession planning, fintech development and championing women in leadership means it is strongly aligned with their objectives and values.
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Interview
The
interview Joe Moynihan and Rupert Pleasant The Channel Islands and the Middle East have been building relationships for decades. But, as Joe Moynihan, CEO of Jersey Finance, and Rupert Pleasant, Chief Executive of Guernsey Finance, explain, there is plenty of opportunity for even greater collaboration going forward
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Interview
Words: Jon Watkins
There are strong links between the two jurisdictions, but are there greater opportunities ahead? JM: I think the next generation, with the way the world has moved, wants to do things properly. They want to deal with a reputable jurisdiction, with professional individuals who understand their requirements, and with people who can protect their family reputation. So high-quality regulation is extremely important and all of that is what we as a jurisdiction can deliver. And that means greater opportunities.
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The new generation, with the way the world has moved, wants to do things properly. They want to deal with a reputable jurisdiction
If you look at a couple of the big recent high-profile wins involving Jersey, the Vision Fund is a Jersey fund structured through the Jersey Private Fund that has significant Middle Eastern investment. The Ethos Financial Services and Technologies Fund, which is a £1bn fund focused on Shariah-compliant investments, is also structured here. These are funds that would have undergone global research in terms of where the best location was for them, and the fact that this jurisdiction was chosen resonates with our view that there are greater opportunities ahead. RP: Here in Guernsey, we absolutely see the region as having great potential, with substantial capital flows
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Rupert Pleasant: Guernsey is also a well-recognised and valued jurisdiction in the Middle East. It is especially well known to Saudi clients for its flexible regulation and robust legal system. Opportunities have developed over the years for clients being able to use new and innovative structures that provide an element of control over their assets, such as the Guernsey Foundation, which has in many circumstances been used for philanthropic purposes. This is increasingly important to families in the Middle East as wealth passes between generations. In Guernsey, we also have a real commitment to green and sustainable finance, with the launch of our Guernsey Green Finance initiative back in 2018. We have been having regular conversations with practitioners in the Middle East working in the green and sustainable finance space, including podcasts with KPMG in Turkey’s Sustainability Director, Richard Betts, where we discussed the developments in ESG and sustainable finance in the Middle East.
Dubai International Finance Centre
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How strong is the existing relationship between the Channel Islands and the Middle East? Are the Channel Islands already a valuable and important jurisdiction for Middle East investors and how has that developed over recent years? Joe Moynihan: Jersey has a long history and a long relationship with the region. We first went there shortly after Jersey Finance was set up in 2001. It was one of the first business trips that Jersey Finance undertook. The industry, Jersey Finance and the government are all invested in the region, and we have been invested for 20 years now. This year, we’re marking the 10th anniversary of the opening of a representative office in the UAE. And we are the only international finance centre to be allowed to have a presence in the DIFC, which for us is a huge privilege and, for me, marks the respectability of Jersey as a jurisdiction in region. The Middle East is an absolutely core market for Jersey. We’ve got information exchanges and regulatory agreements in place between Jersey and the UAE, Bahrain and Oman. And, as well as Jersey Finance having a presence in the region, 31 of our member firms already have a presence in the UAE, while a further 40 visit the region on a regular basis. So we believe that we’ve established ourselves over a long period of time as a jurisdiction of choice for many in the region.
Interview IFC Jersey, St Helier
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Women are playing an increasingly important role in wealth management and decision-making, managing more than $800m in assets in the Gulf region
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What is it that makes Jersey and Guernsey so appealing to Middle Eastern investors, wealth holders and managers? JM: For me, the reputation, the high-quality regulation and the expertise across the board are the most important factors. If you look at Jersey as a jurisdiction, the vast majority of people working in the industry are professionally qualified. There’s a strength you get right across the sector – good-quality law firms, goodquality accounting firms, world-class banks, worldclass service providers on the family office and the corporate wealth side. The financial services ecosystem – the infrastructure – we have is second to none. And we also have a supportive, strong regulator. There are agreements in place that also make working together attractive. We’ve got a double taxation agreement with the UAE, which again is a mark of the relationship that we’ve developed at intergovernmental level and the esteem in which Jersey as a jurisdiction is held within the UAE. The other important point is the independent judiciary – and because we’ve been in financial services or international financial services for 60 years, we have a strong body of case law, which means that when families, corporate businesses or institutional investors are seeking to place assets, there are strong precedents that give them comfort. RP: Investors and holders of wealth in the Middle East like Guernsey for a host of reasons, including confidentially, stability and asset protection. Trust is hugely important – Guernsey is a wellrespected jurisdiction and has a highly regarded reputation, built up over many decades. That is an important aspect of doing business in the region. Guernsey is also seen as a centre of excellence for fiduciary and funds work.
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coming from the GCC region in recent years. There’s particular interest in responsible investing in ESG strategies for bespoke structures. At Guernsey Finance, we also recognise the changing demographics within the Middle East. We have recently released research with Family Capital Publishing, which looks at women in family offices, with a specific focus on the role of women in Middle Eastern family offices. Our research found that women in the Middle East are playing an increasingly important role in wealth management and decision-making, managing more than $800m in assets in the Gulf region. In Guernsey, women make up more than 25% of directors and senior managers of Guernsey fiduciaries, which is much higher than the global average. The diversity of services providers makes Guernsey appealing to Middle Eastern investors and managers, and the growing demand from women investors and managers offers a great opportunity for Guernsey and the Middle East to strengthen our existing ties.
Interview
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Bespoke solutions requires a partner who can see all the detail. Inspiring. Independent. Trusted. Fiduchi has been providing clients from the Middle East with sophisticated structuring solutions for over a decade. We help clients put in place appropriate holding vehicles for private and business assets, providing succession planning and asset protection solutions that are bespoke, consider clients’ precise requirements, and understand their cultural nuances. Key to the region is its Islamic heritage. Fiduchi is well placed to help clients who wish to implement Sharia-compliant solutions. There is no one-size-fits-all Islamic structuring solution; as such, Fiduchi’s independence and flexibility put us in good stead for establishing and administering Sharia-compliant structures for Islamic financial institutions, as well as corporates and families.
Christopher Dungan Regional Director - Middle East +971 52 957 8301 christopher.dungan@fiduchi.com
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Interview
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There has been a big move towards family office services in Guernsey from the Middle East, and an increase in the use of Private Investment Funds Guernsey airport
What can the Channel Islands offer Middle East players that their own market doesn’t give them? JM: We did some work a number of years ago, Jersey’s Value to Britain, which highlighted the amount of investment that is funnelled through Jersey into the UK – and that gateway to the UK is very appealing to Middle East investors. But we also have a significant amount of investments through Jersey that end up in Europe and, increasingly, we’re seeing Jersey being used as a gateway. Increasingly, there is also an understanding that we specialise in family office work, real estate investments, succession planning and philanthropy here, and that we have considerable experience in Islamic finance. In recent years, that has diversified further into alternative investments and corporate activity. We’ve
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done quite a bit of work in-region on ESG, which sits quite nicely alongside Islamic finance in many ways. And our industry is investing heavily in technology, which resonates with the next generation in the Middle East as much as it does everywhere else. RP: I would add that Guernsey has a well-respected legal system that has more than 50 years of case law available to clients, and a robust but proportionate regulator. This gives clients the comfort of establishing a structure in a tried and tested jurisdiction that also has the expertise to manage complex multijurisdictional structures. We are definitely seeing a strong desire for succession and asset protection structures, also. Some of these vehicles will be set up as non-Shariahcompliant structures to hold assets that are located outside the Middle East region – in some circumstances to benefit female members of the family. Which Channel Islands services and offerings are gaining particular traction with the Middle Eastern market right now – what are the big growth areas? JM: In the private client area, it’s very much about structuring the assets properly. Historically, assets would have been acquired in all sorts of different ways, depending on the advice that families would have been given at that time. Now, the next generation wants things structured properly. They don’t want to have anything that’s going to reflect badly on them or on their family, and we’re increasingly seeing that type of work going on here. And part of that work is succession planning. Increasingly, next gen are also much more internationally focused than their parents, much better travelled, often western-educated, and they have strong views and values that they want to see supported. That leads into the ESG piece.
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Since the launch of Guernsey Green Finance in 2018, we have been working hard to develop green and sustainable finance offerings in all our core financial services offerings in Guernsey. These include the development of the world’s first regulated green fund regime – the Guernsey Green Fund; the release of an ESG framework for insurers, which was another world first; and a suite of educational materials that focus on key trends within sustainable finance and ESG for private wealth practitioners and family offices. Guernsey is also a member of several United Nations initiatives, including the Financial Centres for Sustainability (UN FC4S) network, along with several Middle Eastern jurisdictions such as Abu Dhabi. As part of this relationship, we were pleased to support Abu Dhabi’s Sustainable Finance Forum with a pre-launch podcast with Mercedes Vela Monserrate from the Abu Dhabi Global Market, where we discussed green finance developments in the Middle East and the importance of diversity and gender equality in the UAE and Middle East.
Interview We talk about sustainable finance from a Jersey point of view right across the spectrum, but not just about environmental – it’s environmental, social and governance. Earlier this year, we launched our sustainability plan, which was a result of a lot of hard work with an independent consultancy as to how we should position ourselves. It’s a long-term strategy and we’re working on the roadmap to it, but it’s not just necessarily about financial services. It’s also about government, the regulator and the broader island – to ensure we take this seriously and we become a centre that is not necessarily looked at for sustainable finance but is a sustainable finance centre.
Jersey has done quite a bit of work in-region on ESG, which sits quite nicely alongside Islamic finance in many ways
RP: There has been a big move towards family office services in Guernsey from the Middle East. There has also been an increase in the use of Private Investment Funds (PIFs) in Guernsey, with a recent cutting edge refinement of the PIF regulations to better accommodate family office business, as well as asset protection and succession planning structures. Furthermore, there has been considerable interest in our expertise in sustainable finance and ESG, in which we are a world leader. The promotion of green finance and investment in sustainable projects is a key growth sector globally and this trend isn’t bypassing the Middle East. In Guernsey, we have proven expertise and passion for green and sustainable finance. Our research in the role of women in Middle East families and family offices also showed the growing importance of governance in private wealth structures. Guernsey not only has an above global average of female representation in financial services but also a reputation for advising on, achieving and maintaining good governance. International firms are also tailoring mandates for specific requirements for ethical investments and are tailoring the portfolios around religions and beliefs. A scholar is not required for a foreign Islamic investment portfolio, as long as the principles and the restrictions are agreed. Do the islands have particular strength and expertise when it comes to compliance with Shariah law – and is that helping the flow of business? JM: Very much so. One of our business development team in Dubai, Fazel Bhana, is a specialist in Shariah finance. And then within the industry here we have a number of firms that have specialised in and worked with Shariah products for a number of years, so there’s plenty of expertise. We have also done some work on Shariah products and Shariah law, to see what changes we need to make to our legislation to facilitate it. And, as it turns out, we didn’t have a huge amount of change to facilitate Shariah compliance. The legislation as it currently stands allows us to facilitate what needs to be done. RP: Guernsey offers Shariah-compliant trusts and foundations, which can be approved by Shariah scholars in the Middle East. These have the flexibility to meet the client’s Shariah-compliant needs. Guernsey lawyers and fiduciary practitioners have the expertise to establish and manage such structures on behalf of Middle Eastern clients and have done for years.
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Jersey
How do you see the market trajectory from here – and what are you doing specifically to further enhance the relationships between the Channel Islands and the Middle East? JM: Because of the pandemic, most of the work we have been doing has been virtual, but we will be starting to get back out on the road again soon – running events in-region. And I’m aiming to be in Dubai twice before the year is out. We’re also doing some fact-based research on Shariah-compliant products this year. Plus, we’re sponsoring STEP Arabia, the development event, this year and we will be running another of our leadership events for females in-region. We’re also in discussions to strengthen the government relationships in-region. RP: Middle Eastern clients will always appreciate trust and confidentiality from those they do business with, especially when discussing succession planning and asset protection.
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Interview
Guernsey
Guernsey is a well-known jurisdiction for providing family office services to Middle Eastern clients, and we foresee a continuing flow of business. Guernsey’s increasing reputation for the provision of expertise and flexibility is well known to clients and their trusted advisers in the Middle East. Guernsey Finance, under the brand We Are Guernsey, hosts private wealth roadshows to the Middle East to promote our private wealth and pension sectors. We take professional firms that represent those sectors to promote Guernsey as a leading global financial centre, enabling clients to meet one-on-one with our delegates and get a better understanding of the structures and expertise that are available here. We Are Guernsey is also in the process of recruiting a dedicated Middle East representative who has extensive knowledge of the region, with a focus of promoting Guernsey and introducing Guernsey industry to key Middle East contacts. Moving into the future, is it vital that the Channel Islands continue to attract the best talent, with the best knowledge to meet these demands from the Middle East? JM: I would say that’s critically important. This business is a people business. It’s all about the expertise and it’s a people business at whatever level. It’s about having the knowledge to be able to interpret complex opportunities and scenarios, as well as having the ability within the industry to understand the trends – so we are able to adapt quickly to meet those trends. So, yes, attracting talent is really important. In addition, we work very closely here in Jersey with Skills Jersey. In fact, one of our team is chair of one of the groups there and we work through that with the schools. One of the things we have done is to launch a Rising Stars Awards, because it’s really important that we identify and recognise the future of leaders of this industry and highlight them. That also helps us build pride in the industry. I spoke to somebody the other day about trust, and this individual said to me that if you speak to kids now
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about where they think they can do the most good, there has been a switch in mindset. A lot of kids now feel they can do more good in the private sector than they could in the past. They no longer feel the only place they can do good is in the NGOs or as politicians. There is a view that a lot of the private sector has turned a corner – and is a lot more responsible as a business. If you are responsible as a business, you will attract the right people both in terms of employees and in terms of customers. That means we have a great opportunity to attract the best talent. But we have to work hard at it. The best talent want to know a lot about a business now before they will work with it. What are your values? What are you doing to help the community? What are you doing on the environment? And that’s almost like forcing the mindset change, which is great. RP: Guernsey already has a strong talent base that knows the region extremely well, either from having an office in the region or from frequent visits. Our mantra is safety, security and stability – all of which Guernsey demonstrated during the Covid-19 pandemic. We had two short, sharp lockdowns but other than this Guernsey had no social distancing, no face masks, all shops, restaurants and bars fully open for business, without restriction. How we dealt with Covid-19 has attracted recognition and praise from around the globe, so Guernsey is considered a very attractive place to live and do business. Not only does this enhance Guernsey’s reputation as a robust jurisdiction for clients to place their business, it has also helped us attract and retain the best talent possible, which includes many experts and practitioners who focus on the Middle East. With more opportunity coming to Guernsey from the Middle East, this will bring even greater expertise to the island to manage these clients. It is also common for firms that have an office in Guernsey and the Middle East to second staff between each jurisdiction, thereby providing them with valuable experience in each market. n
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Capturing the next generation of investors in the Middle East Mark Leale, Head of Quilter Cheviot Dubai Office and Senior Executive Officer, explores the impact of the changing Middle East demographic
WHILE THE TRANSFER of wealth to
the next generation is nothing new, the level of assets making this transition is quite staggering, with the Middle East being no exception. Now, it is up to wealth managers and other professional advisers to establish what matters to this younger generation of investors, their drivers and the way in which they wish to interact with providers. The Middle East is steeped in a fascinating history. Those who take time to understand the culture will learn that while technology and other advances may alter the way in which solutions are delivered, and the areas in which investment is focused, it is very much traditional values that will stay the course. Quilter Cheviot has its own long history, recently celebrating our 250th year. We are no strangers to the transition of wealth between generations. We ensure our service remains relevant, embracing efficiencies driven through innovation, while staying true to our belief that a personalised service builds the most meaningful and longstanding relationships.
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The concentration of wealth among the local and expatriation population in the region has not gone unnoticed by international financial services providers. A broad mix of these firms have moved from an approach of making trips into the Middle East to one where they have established a permanent presence in order to better serve their clients. The development of centres of expertise, such as the Dubai International Financial Centre and Abu Dhabi Global Market, with forward-thinking regulatory environments, has really supported and encouraged the expansion of this sector. Wider changes in regulation further serve to better protect consumers, ensuring that financial services businesses in the region have robust processes in place and are held accountable for the advice that they offer. This accountability, and the assured suitability of our portfolios, runs through our operation and is a welcome approach for many clients across the region. Where their parents may have been inclined to look at individual investment opportunities, our experience is that the
younger generation values the ability to discuss markets and holdings within their portfolios. They prefer to leave the day-today management and asset selection to our investment managers. The ability to tailor these portfolios, however, gives them the scope to shape the direction and allocation of the capital, choosing sectors that resonate with them. Making sure our portfolios are adapted to meet the needs and objectives of our clients is paramount, and responsible investment is an important example of this. Younger generations who, among other issues, hope to focus on making a better and more sustainable world, are more and more likely to wish to reflect this through their investments. As such, propositions such as our Positive Change strategy have been designed for clients who would like a pragmatic approach that combines funds that invest with a sustainability focus or for impact, with funds managed by leading ESG practitioners. Meaningful engagement by fund houses with company management is prioritised
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over formal exclusions on the basis that engagement can encourage change where it is needed most. This is relevant to those who will inherit wealth. Shariah principles can often dictate portfolio decisions and, with a closer look at these Islamic investment considerations, it is understandable why responsible investment has really caught the imagination of people living in the region, and indeed has become a must-have within the investment world. To that end, our analysts integrate ESG factors within their research. Additionally, we have a strong active ownership agenda, which focuses on voting and engagement with primarily the companies we invest in. Looking at individual sectors, technology has featured heavily within the asset allocations of many clients and has driven some great performance over recent years.
One theme we see running through many portfolios in the region, particularly appealing to the younger generation, is fintech
One theme we see running through many portfolios in the region, particularly appealing to the younger generation, is fintech. Within our asset allocation we have added a degree of exposure through private equity vehicles, allowing our clients to have access to exciting opportunities, while maintaining diversification and liquidity. Detailed research by our teams into such opportunities allows for sound forward-looking investment decisions, providing clients with an interest and understanding of the investment choices
without needing to be responsible for the trading decisions. It is through these considerations that investors can benefit from growth opportunities, while not losing sight of the importance of a risk-weighted approach. Just as our clients acquire knowledge from their parents, we have learned much from our 250 years in business. Together, we take the value of this experience and work in partnership to continue to build and preserve wealth for generations to come, in a way that embraces what is important to our clients today. n
FURTHER INFORMATION
For more information, contact Mark Leale. Tel: +971 4 568 2361 Email: mark.leale@quiltercheviot.com
Investors should remember that the value of investments, and the income from them, can go down as well as up. Investors may not recover what they invest. Past performance is no guarantee of future results. This is a marketing communication and is not independent investment research. Financial instruments referred to are not subject to a prohibition on dealing ahead of the dissemination marketing communications. Any reference to any securities or instruments is not a personal recommendation and it should not be regarded as a solicitation or an offer to buy or sell any securities or instruments mentioned in it. Any mention of a specific security should not be interpreted as a solicitation to buy or sell a specific security.
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Trade agreements
Jersey does its BIT Jersey is striving to seal a Bilateral Investment Treaty (BIT) with the United Arab Emirates, which could boost investment on the island and stimulate greater access to Jersey’s expertise among businesses and investors in the region AMID THE FALLOUT from Brexit, the Words: David Craik
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UK government is busy attempting to deliver on its promises to UK Leave voters by trawling the global stage for new free trade agreements – Japan and Australia are the latest to hit the headlines. But it’s not just the UK that’s working hard to achieve international trade agreements. One outcome of the split from the EU is that places such as the Channel Islands are free to pursue their own agreements, rather than to just have UK agreements extended to them.
As a result, Jersey is also ‘thinking global’ – and is on the road to signing its first Bilateral Investment Treaty (BIT) with the United Arab Emirates. So what exactly is a BIT? Carey Olsen defines it as “an international agreement where the governments of two territories mutually agree to guarantee minimum standards of protection to treat individuals and legal persons … from one country who invest in the other’s territory fairly”. Prior to 2018, Jersey had been required to request that existing UK BITs be
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Trade agreements
KICK-STARTING THE PROCESS “We have a long-established Jersey Finance office in Dubai and an existing strong relationship,” says Joe Pennell, Policy Adviser (UK and Global Affairs) in the Government of Jersey’s London office. “The BIT is still under active negotiation, but it is our ambition to sign this. If and when we sign, it will reinforce that relationship. The negotiation is in a reasonably good place and with more face-to-face meetings now possible, we hope to kick-start the final pieces of it. “However, it is hard to give a timescale, especially with uncertainty about the ratification process in the States of Jersey and the fact that this is our first one.” Christopher Tan, Associate in Carey Olsen’s dispute resolution and litigation practice in Jersey, believes the focus on the UAE makes sense.
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“The nation is a very important trade partner. It is a growing market and ripe for a deepening of the relationship with Jersey,” he says. “It is, in particular, a global centre for Shariah-compliant Islamic financing. Although that may seem specific, that would be an area where Jersey Finance would be poised to co-operate with the UAE and be an interface in facilitating Emirati companies accessing and dealing with Western capital. “This is a good opportunity for Jersey to cement its international identity and make an arrangement that works for it specifically,” he adds. Pennell hints that the BIT could follow an “established structure”. It will likely give protection to investors from both territories through arbitration procedures and investor state dispute settlements – a procedural mechanism allowing an investor from one country to bring arbitral proceedings directly against the country in which it has invested. “It would provide comfort and protection for investors of both jurisdictions, which we hope would support further commercial and business flows,” Pennell says. Tan continues: “While the full details are not yet available, it would likely be the case that, if a Jersey company were to
invest in the UAE, it would be entitled to expect certain minimum standards of fair treatment from the Emirati government (and perhaps assurances that it will be treated no worse than any other foreign investor). Likewise, any UAE investor coming to Jersey. “A BIT is a very important step in cementing an economic relationship between two jurisdictions and promoting a stable and well-governed environment to investors.” Tan also believes that a UAE BIT might contain additional terms relating to the financial services sector, a key pillar of the Jersey economy.
DAY-TO-DAY IMPACT For Jersey lawyers, fund managers and administrators, there may not be major day-to-day changes under a BIT structure, but Tan says it does bring the guarantee of being looked after if they feel they have been treated unfairly in the UAE. “When you make the business decision to invest, the dispute resolution mechanism isn’t always at the forefront of your mind – but having the guarantee that you are working in a trustworthy and reliable territory is important,” Tan states. “It can be powerful. If you feel you’ve been treated unfairly, you have the right to bring that particular government before
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extended to the island. However, only a third ever were, meaning certain UK BITs with big-hitting economies such as China or emerging financial centres such as the UAE did not apply to Jersey. That changed three years ago, when Jersey was given an entrustment by the UK to negotiate deals on its own behalf. The first to be explored under that new freedom is with the UAE. So what will it mean?
Trade agreements
Under most international treaties, you have to be a state to sue another state – that’s not the case under a BIT
an international tribunal and potentially receive very significant compensation awarded by independent arbitrators. “Under most international treaties, you have to be a state to sue another state, but that’s not the case under a BIT,” continues Tan. “So, you have protection in the local court system and in international law.” Alex Fawke, Managing Associate at Linklaters, gives an example of “a government promising not to nationalise your property or oil field overnight without compensating you or discriminating you in local law compared with domestic firms”. “It can also be more nuanced things,” he adds, “such as suddenly losing an import licence or a right to operate licence. If that was done unlawfully or to favour a local company, that could amount to a breach. “Recently, Spain has had a lot of cases against it because it had a very generous renewable energy subsidy regime that attracted foreign investors and then it changed the framework, leaving some projects unviable.”
FUTURE BITS Fawke believes Jersey will look to sign more BITs in the future, and that Africa could be the next target. “Countries there are looking for investment,” he says. Tan also foresees future BITs being signed with many of Jersey’s major trading partners – perhaps with those jurisdictions that already have double taxation agreements with Jersey, such as Hong Kong.
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“As Jersey grows in prominence on the world stage, having more directly negotiated BITs will be helpful,” Tan says. “The needs of the Jersey business environment and Jersey businesses overseas do not always exactly align with the UK, so the option of autonomous deals can only be a good thing for the island.” Of course, the Channel Islands’ strength comes from Guernsey as well as Jersey, and Guernsey is focused on furthering trade agreements too. The States of Guernsey issued a consultation in respect of its position on BITs, which closed on 30 September. “The consultation sets out the background, and Guernsey’s existing network of BITs, along with those signed by the UK as a comparator,” a spokesperson says. “Now that the consultation is closed, the States intends to develop policy
proposals in respect of which jurisdictions to focus attention on.” Areas of discussion include the extent to which existing BITs benefit Guernsey, the merits and potential economic benefits of having additional BITs extended to Guernsey, and whether the absence of BITs is impeding the activities of Guernsey’s finance sector. Tan thinks Jersey and Guernsey could work on BITs together. “They may in future be in a position to negotiate them jointly,” he says. “Belgium and Luxembourg very often negotiate together with foreign countries at present when it comes to BITs.” Whatever decisions the islands take on BITs, Fawke believes this is a prime opportunity for Jersey – and by extension Guernsey – to develop a more independent sense of themselves. “I don’t see the islands venturing into a huge number of other fields of international law,” he says. “But it is a gradual step towards what looks like something more sovereign.” n
What is a BIT? A Bilateral Investment Treaty (BIT) is an international agreement where the governments of two territories mutually agree to guarantee minimum standards of protection, to treat fairly individuals and legal persons such as companies from one country who invest in the other’s territory. It is a series of legal protections that encourages and gives comfort to businesses and investors when considering entering a new territory and provides extra succour for entities already there. “It is an umbrella of legal protection if something goes wrong,” explains Alex Fawke, Managing Associate at Linklaters. “BITs are designed to promote investment. This is what will excite Jersey businesses and investors when we see the full details emerge.”
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Are SPACs the new model for private equity? Simon Dinning and Angus Davison, Partners at Ogier, discuss the broadening appeal of SPACs THE RE-EMERGENCE OF special-purpose acquisition companies (SPACs) in the past couple of years shows no sign of slowing as the demand for SPAC formations continues into the second half of 2021. Already by May this year, there were more than 300 listed SPACs generating gross proceeds of more than $100bn. To put this into perspective, that figure has already surpassed the total proceeds from SPACs in 2020 (in excess of 200 listed, generating gross proceeds of about $80bn). Increasingly diverse clients are now looking to be involved in SPACs. General investors have, for some time, recognised the advantages that SPACs offer, including access to investments and transactions that might otherwise be restricted to private equity (PE) or (VC) firms. Now, a growing number of VC and PE firms have shown increasing interest in incorporating SPACs into their investment and structuring toolkits. In many respects, the aims of SPACs and customary VC/PE strategies are similar, but firms are seeing that SPACs themselves might offer multiple advantages over the traditional acquisition and investment holding structures utilised by PE. This year there have been a number of PE-backed SPAC launches, as well as announcements of proposed PE SPACs, which in total could amount to several billion dollars in initial public offering (IPO) proceeds. If these SPACs prove successful, the SPAC could become a major part of how PE does business over the next decade. While the majority of US-listed SPACs are incorporated using Delaware corporations, a SPAC incorporated in either the Cayman Islands or the BVI is often seen as an attractive alternative. It may offer a more efficient postacquisition structure and remove any additional US tax, legal or regulatory implications that may arise simply as a consequence of using a US vehicle.
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The US Securities and Exchange Commission and NASDAQ allow for rule concessions for non-US issuers that qualify as ‘foreign private issuers’ and for foreign entities to follow more flexible ‘home country rules’. Additionally, the Cayman Islands and the BVI are popular SPAC jurisdictions for other reasons. These include limited additional regulatory compliance requirements, the suitability of the Companies Act (Revised) of the Cayman Islands and the BVI Business Companies Act and tax neutrality. There’s also a close similarity between Cayman and BVI law compared with Delaware company law, which allows for an easy translation of existing standard legal forms and investor understandings from one jurisdiction to the other. Ogier has extensive experience in advising on setting up Cayman and BVI SPACs, including acting for PE firms. Notable SPACs we’ve recently worked on include ITHAX Acquisition Corp on its $241.5m IPO on NASDAQ, and ARYA Sciences Acquisition Corp IV on its $130m IPO, also on NASDAQ. NASDAQ and other leading US exchanges allow listings by SPAC entities formed in other leading offshore jurisdictions, too. Jersey and Guernsey, for example, are no strangers to SPACs, which have historically used the Channels Islands as a jurisdiction to domicile while seeking a listing on a large market such as the London Stock Exchange or AIM. Ogier in Guernsey recently advised dMY Technology Group Inc II (dMY II), a New York Stock Exchange (NYSE) listed SPAC on its successful $1.5bn business combination with UK-based Genius Sports Group Limited (GSG). The new Guernsey incorporated company, Genius Sports Limited, was listed on the NYSE. However, for smaller SPACs – for which the cost of listing on a market such as the LSE may impede their ability to get off the
ground – the ability to list SPACs on The International Stock Exchange (TISE) is a development that creates an interesting opportunity. TISE initially introduced rules for listing SPACs in 2015 and it has recently revised them to align with developing market trends in both the US and Europe and, notably, where there may be an institutional investor base. The LSE is looking to enhance the UK listing rules so that the UK can better compete with the US and European exchanges for the listing of SPACs, but until enhancements are in place – towards the end of 2022 – TISE represents a costeffective, quick and efficient route to the listing of SPACs in a UK time zone. SPACs have been enjoying steady growth for some time and the conditions that have fuelled the current boom look likely to exist for the foreseeable future. Given the advantages that SPACs can offer, private equity firms will likely continue to play a starring role in the SPAC market and help to sustain SPAC growth going forward. n
FIND OUT MORE
Simon Dinning is a Partner at Ogier and specialises in providing corporate and finance advice on transactions involving BVI or Jersey incorporated entities. He has particular expertise in equity capital market deals, cross-border mergers and acquisitions. Also a Partner at Ogier, and based in Cayman, Angus Davison has a broad corporate finance practice advising investment funds and other clients on financing transactions, IPOs, mergers and acquisitions and regulatory obligations.
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Independence in the face of consolidation Paul Oliver, Group Director of Lancaster Guernsey, explores (some of) the ‘seven habits of highly effective trust companies’
FEW OBSERVERS OF the Guernsey private wealth market can have failed to notice accelerating consolidation in the trust and fiduciary services market, following various mergers and acquisitions by bank-owned or private equity-backed trust companies over recent years. This year, we have seen this trend continuing, as several local and international trust companies continue to proceed with acquisitions of independently owned fiduciaries in order to grow their client base and footprint. In light of such consolidation, what room is left for the independently owned trust company? At Lancaster Guernsey, we adopt the view of Stephen Covey, author of The Seven Habits of Highly Effective People, in seeing this consolidation as an opportunity that reinforces our mindset and mantra – we act and are not acted upon. The future is in the hands of ourselves and our clients; and the future is bright.
ownership and independent in thought. The initial clients wanted succession planning and asset protection. Since 2007, the client base has remained relatively small in number by design, but big in diversity – both in terms of nationality and needs. However, there are common themes – asset protection, succession planning, confidentiality, discretion and a continuity of high-quality personal service. How do you achieve that? Because Lancaster is committed to independence, it can offer its staff certainty. Its staff can then ensure continuity of service for Lancaster clients. It is a virtuous circle illustrated by the fact that each member of staff has an average of more than 20 years’ experience in the industry. All staff members know all clients and their entities, meaning that if a client calls or emails, then anyone in the office is able to assist with their query.
WHO ARE LANCASTER GUERNSEY?
WHY LANCASTER GUERNSEY
Lancaster Guernsey was formed in February 2007 by Simon Graham, with an ethos to provide an exceptional level of discreet service, personally tailored to each client’s needs. Adopting Stephen Covey’s second habit – “Begin with the end in mind” – Simon believed that he couldn’t provide that service unless Lancaster was independent in
We may be small in the number of clients, but we are big in our ambition for Lancaster and our clients. In 2013, Lancaster was licensed by the Guernsey Financial Services Commission to advise on and monitor investments, and administer investment-regulated funds, including private investment funds (PIFs). We added to our fiduciary licence in
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2018 to give us the ability to administer and act as trustee to individual and employee-related pension schemes. So, with a fiduciary, pension and investment licence, Lancaster can do everything a client would expect from a corporate services provider. Independent in both ownership and mindset, we strive to be the long-term trusted adviser to our clients – and we earn and retain that trust through delivery and excellence. Clients are busy looking after and running their own businesses and may not appreciate the technical aspects of what we do. We are flexible and nimble. We don’t have unnecessary red tape or bureaucracy and therefore when a client asks for something to be done, we do it – smoothly and efficiently. From a technical perspective, we know what we are doing and we do it well. We are well versed in the use of trusts, companies, foundations, partnerships and funds – or a combination of them all. Whether it is banking or investment services, tax planning or legal advice, our international network of long-term relationships ensures that we get the best advice for the client. Alternatively, given that we are independent and flexible, we are happy to work with the client’s appointed representatives where we can.
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HABIT 3: PUT FIRST THINGS FIRST In Seven Habits of Highly Effective People, Stephen Covey identifies that one of the main obstacles to getting things done is that we get too bogged down in the urgent tasks of life – some genuinely urgent and some that only seem urgent because we allow them to distract us from higherquality thinking time. At Lancaster, we staff our business so we can spend time thinking about the important things – future planning, relationship building and new opportunities. The global pandemic seems to have encouraged our clients to do the same. Over the past 18 months, we have seen a wealth of new enquiries for structures that clients have plainly been mulling over for some time and now see the importance of getting done – perhaps they have been reading Covey’s book too? Clients know how to run their own businesses very well, but, for structuring and administering a vehicle for future generations in a well-regulated and transparent jurisdiction such as Guernsey, they turn to us. We work with the client and their appointed tax and legal advisers to determine their primary objectives for structuring their wealth in a bespoke manner that suits them. We don’t have a house view on what is best – we listen to the client and go from there.
A GUERNSEY FOUNDATION That said, we are seeing clients and advisers structuring their wealth in several ways, including the use of Private Trust
We may be small in the number of clients, but we are big in our ambition
Companies (PTCs) and Protected Cell Companies (PCCs). But one vehicle that has stood out recently, and has grown in popularity in recent years, is the Guernsey Foundation. Some of the reasons for this are: ● Cutting edge legislation – Guernsey’s foundations law is internationally recognised as modern and flexible, and able to support any number of bespoke structures – ideal for our intermediaries and clients. ● International appeal – A foundation has a separate legal personality from its founder and can hold assets in its own name. However, by appointing a guardian and beneficiaries, it can imitate the best features of a trust. As a result, clients from both common and civil law countries are comfortable with a foundation. ● Client control – A foundation allows
the founder to retain a certain level of management as well as control and influence over the day-to-day administration, either through the appointment of particular officers to the foundation, or by adapting the constitutional documents. ● Primary uses – Typically, we see a foundation being used to protect family wealth by holding its investment portfolio, interests in personal business assets or shares in a private foundation company. Lancaster Guernsey has extensive experience in how to get the best out of a foundation for a client’s individual interests. We can provide council member services through our in-house corporate entity or experienced individuals. And we have a highly skilled administration team who ensure that all activities are carried out in accordance with the appropriate tax and legal advice. n
FIND OUT MORE
To find out more about how Lancaster Guernsey can support your succession planning and asset protection structuring requirements, please contact Paul Oliver or Simon Graham. And don’t forget Habit 1: “Be proactive. Do it today!” Simon Graham, Group Managing Director Email: simon@lancaster.gg Paul Oliver, Group Director Email: paul@lancaster.gg Further details can be found on our website: www.Lancaster.gg
Lancaster Guernsey is the trading name of Lancaster Trustees Limited, registered in Guernsey number 46368, and Lancaster Investment Services Limited, registered in Guernsey number 56111. Both are licensed and regulated by the Guernsey Financial Services Commission and the Registered Office is 2nd Floor, West Wing, Dorey Court, Admiral Park, St Peter Port, Guernsey, GY1 2HT
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Wealth planning
Strategies for succession wealthy Middle Eastern families are increasingly looking to the Channel Islands for structuring and succession strategies Words: David Burrows
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Wealth planning
planning is changing. An evolving wealth-holder demographic means young people are increasingly likely to be involved in wealth management decisions. There’s also a growing demand to tailor succession planning to individual needs. And both of these factors are driving wealth holders across the region to look outside the jurisdiction for guidance. Jersey and Guernsey are increasingly being called on to deliver that expertise. In fact, Jersey and Guernsey have been ranked within the four most favoured jurisdictions by advisers to Middle Eastern families seeking wealth management and succession solutions outside the region. There are plenty of reasons behind the particular interest in the Channel Islands, according to Angela Calnan, Partner at Collas Crill in Guernsey. “Given the direction of travel in terms of global transparency, the advantages of some of the lighter-touch regulatory regimes have fallen away and we now have more of a level playing field,” she explains. “Guernsey’s and Jersey’s robust regulatory environment is therefore now viewed as a real positive by families.” “Our robust firewalls are also a real advantage in the face of forced heirship claims,” she adds. “And these have been tested in our courts and have held up very well indeed.”
CULTURAL TIES In addition to these developments, Guernsey and Jersey professionals have invested a considerable amount of time, money and energy travelling to the region over the past decade, Calnan explains. She insists this personal touch and a commitment to service delivery are culturally very important in the Middle East. “Clients in the region are incredibly astute and can spot travelling salesmen a mile off,” she says. “Clients demand that their service providers show a genuine commitment to the region and to the family.
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“Channel Islands providers have played the long game in that respect – building up relationships with multiple generations of families over many years, and that’s something that has really paid off.” Mark Leale, Head of the Dubai Office at Quilter Cheviot, takes a similar line. “Middle Eastern families have been working with Channel Islands firms for many years. Through this long-standing relationship, expertise has developed among providers, and individuals have built specialist knowledge in working with clients throughout the region. “These essential elements have resulted in a trust that is paramount for many families, and that is further supported by the first-class regulatory framework within which their assets are protected.” Nancy Chien, Partner at Bedell Cristin and the head of the firm’s international private client team, points out that many Middle Eastern families also have connections with the UK, so the proximity of the Channel Islands to the UK makes them an ideal location for families to set up their structures. “It’s very easy for them to come to the Channel Islands for meetings with their service providers and advisers,” she says. “Furthermore, Jersey and Guernsey are mature offshore centres with robust legal and regulatory frameworks. “Many Middle Eastern families are setting up their structures for asset protection and succession purposes. Tax is often not a key driver, therefore establishing their structures in mature jurisdictions that can grow with the family, and having the requisite infrastructure and expertise to deal with any disputes, is important for them.”
MEETING CLIENT CHALLENGES As Middle Eastern families explore increasingly complex succession planning and wealth management strategies, meeting their needs is a challenge – not least as many seek to create liquidity while safeguarding trophy family assets.
The personal touch and a commitment to service delivery are culturally very important in the Middle East
Liquidity hasn’t been a huge issue to date, Calnan says, since banks have been prepared to lend against trophy assets even when, during lockdown, it was a challenge for the banks’ valuers to gain physical access to real estate assets. That, she explains, may have slowed the pace of transactions – but they haven’t gone away. “Other challenges have been in the area of compliance,” Calnan says. “It is becoming increasingly challenging and lengthy to start banking relationships for families and their structures in terms of onboarding. And the cost of the increased compliance burden with banks, trustees and lawyers means that establishing and running structures is only really cost-effective for those with very significant wealth.” Hugh O’Donnell, Head of Equiom Fiduciary, Middle East, explains that, over the 40 years in which Equiom has
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MIDDLE EAST INVESTING and wealth
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Diversification across jurisdiction and industry lines is a key focus for local families
serviced Middle Eastern clients across the region, demands have evolved from simple corporate service requirements to more sophisticated succession planning, funds, pension structures, charitable vehicles and family office set-ups. “While trust companies have traditionally struggled to structure local assets, the advent of Dubai International Financial Centre [DIFC] and Abu Dhabi Global Market [ADGM] foundations and trusts have allowed us to assist with clients’ local as well as international structuring needs,” he says. “Diversification across jurisdiction and industry lines is a key focus for local families,” O’Donnell adds. “While there has been great reliance on revenue from oil and gas, Gulf Cooperation Council real estate portfolios and local sponsorship deals, the gradual shift to 100% foreign ownership, the drop in oil prices and real estate fluctuations are causing clients to re-evaluate their longterm investment strategies.”
SUCCESSION PLANNING As for the growing importance for highnet-worth individuals and businesses with international assets of navigating the complexities of succession planning, Calnan insists the reasons are clear.
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“We have seen a generation of business owners pass away and the next generation has seen first-hand the huge implications of estate duties. They have also seen the fragmentation of boards where patriarchs and matriarchs have died owning family business shares directly,” she says. “Rather than advisers such as myself warning of these implications, there is now a generation that has experienced this for themselves – and that has led to a huge level of activity.” James Campbell, Global Head of Private Wealth at Ogier, adds that, since HNWIs often now hold assets around the globe, there is a greater requirement for them to be familiar with the tax and succession laws in multiple jurisdictions. Failure to plan appropriately for this can result in sometimes unnecessary exposure to local taxation and – worse still – assets passing to family members for whom they were not originally destined, as many jurisdictions still have forced heirship regimes. “It is important to adequately prepare for the complexities of transfer of wealth to the next generation,” he says. “It can be a fatal decision to not have a framework in place – power struggles and conflict can ensue when a business or family assets are transferred to the next generation.
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Wealth planning
“A central framework created with the input of experienced professional advisers is vital to ensure an organised transfer, especially in instances whereby business or family assets are located internationally.”
SIMPLIFIED SURVIVAL
It can be fatal not to have a framework in place – power struggles can ensue when a business or family assets are transferred to the next generation
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It is estimated that more than 80% of non-oil domestic product in the Gulf is generated by family businesses – yet there is a sentiment that echoes throughout the Middle East that only 4% of Middle Eastern family-owned businesses will survive to the fourth generation. O’Donnell points out that, in response to this conundrum, prominent figures such as Abdul Aziz Al Ghurair – currently Chairman of Mashreq Bank – are leading the charge to encourage families to plan and governments to simplify succession for regional businesses and families. “Those tools are finally available for clients to take advantage of, with trust and even foundation laws firmly established in the DIFC and ADGM, Bahrain and Qatar, among others,”he says. “Now that the UAE has adopted its own federal trust law, private clients have an arsenal of solutions to choose from, both regionally and internationally.” Chien believes that DIFC and ADGM foundations should enable family members
to have greater control over the investment decisions that in turn directly allow the younger family members to achieve their objectives. She is quick to add that the older generation can nevertheless sit on the council board and oversee that investment decisions are also aligned with their values. While trust companies have traditionally struggled to structure local assets, the advent of DIFC/ADGM foundations and trusts have, according to O’Donnell, allowed advisers to assist with clients’ local as well as international structuring needs. However, the DIFC and ADGM are still in their infancy and, as Charlotte Murtagh, Head of Private Office at Zedra, points out, this means there’s a lack of legislation and certainty for families wishing to establish a local solution. “In addition, the lack of experienced staff means they remain somewhat behind jurisdictions such as Jersey, with its 40 years of case law,” she says. “That aside, however, the proactive engagement by many regions to establish a more western attitude to family and commercial matters can only be a good thing and in time experience will build and they will develop their own niche areas of expertise.” The Channel Islands are clearly ideally placed to support Middle East families and
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Wealth planning
LEGAL SERVICES
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The generational shift
businesses in their transitions. The question now is how this relationship and offering can be developed further. Leale believes close ongoing interaction between the Middle East and the Channel Islands is essential, whether at a governmental, regulatory or provider level.
THE SHAPE OF THINGS TO COME “It is important to recognise that the ADGM and the DIFC have a role to play in the structuring needs of families in the region, alongside those in place in Guernsey or Jersey, each fulfilling a specific need and addressing the complexities of their circumstances. “The regional financial centres are already home to many Channel Islands firms. This commitment to establishing a local presence is often welcomed by clients, whether providing local points of contact and accountability or bringing in existing expertise to deliver solutions for assets closer to home.” Leale concludes: “Continued commitment to offices in the Middle East by Channel Islands firms sends a positive message to clients in the region.” n
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A shift in wealth-holder demographic means younger generations within families are now working with the advisory community to drive positive engagement in respect of discussions around family governance, constitutions and values. Quilter Cheviot’s Head of Dubai Office, Mark Leale, believes this greater level of interaction is important for both the family members and providers themselves. “We will often see the younger generation continue many of the traditional values of their parents, but the way in which they wish to operate and be serviced – and their priorities – can bring a new perspective,” he says. “From our standpoint, as an investment manager, their investment philosophy can often be focused on more than driving profit but also choosing businesses and opportunities that drive positive change.” He adds: “ESG considerations have close similarities to many of those for Shariah-focused investors. Our ability to tailor investment mandates allows us to take these discussions a step further in taking client priorities into account when managing their portfolios.” Bedell Cristin Partner Nancy Chien takes a similar line, arguing that the younger generation is more conscious about how their actions or financial choices affect society as a whole. This is why they are putting more attention on sustainable investing as opposed to investing purely for financial gain. “As the younger generation has been engaged longer with sustainable investing, they are encouraging the older generation to shift their views on investing. This will help to align family values and governance in the longer term,” she says. Matt Guthrie, Partner and Head of Private Wealth at Ogier in Guernsey, makes the point that family governance seldom succeeds when it is strictly the founder’s vision imposed on the next generation. Capgemini’s World Wealth Report 2021 revealed that HNWIs are currently seeking alternative investment to diversify their portfolio. Guthrie says HNW families were realising the importance of allowing future generations the opportunity to capitalise on the developments and challenges of the future. “The driver behind this seems to be twofold – first, allowing the next generation the opportunity to take responsibility for specific sectors of the family’s investments and, second, leveraging the family’s own resources in order to gain exposure to new and innovative investment opportunities. “HNW families are also increasingly concerned to ensure that their investments take proper account of their environmental impact.”
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wealth edition PUBLISHING IN February 2022 FOR EDITORIAL QUERIES, CONTACT jon.watkins@blglobal.co.uk FOR ADVERTISING, EMAIL CARL.METHVEN@BLGLOBAL.CO.UK
Expat investing
investment flight path Channel Islands firms are helping the many expats based in the Middle East to build diversified and sustainable investment portfolios amid a complex regulatory environment
Words: Gill Wadsworth
THE MIDDLE EAST is one of the most
popular destinations for expats. Nearly 90% of the United Arab Emirates’ population and more than a third of those living in Saudi Arabia are from abroad. In Qatar, just 15% of the population comprises domestic nationals – and the story is similar in Kuwait, where 70% of inhabitants are from overseas. While most foreign nationals living in the Middle East are less wealthy migrant workers from India, Egypt, Bangladesh and Ethiopia, there are plenty of westerners who have chosen to set up in the Gulf
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because of a boom in employment opportunities. These range from work in the medicine and healthcare sectors, to IT and artificial intelligence and, more recently, renewable energy. Yet while there may be ample job opportunities for those wanting to relocate to enjoy considerably warmer climes and tax-free salaries, there are challenges when it comes to building an investment portfolio that suits the vagaries of an expat lifestyle in the Middle East. Matt Wintour, Head of Adviser Solutions at Brooks Macdonald International, says: “Identifying the challenges for expats living in the Middle East is in great measure the same as anywhere in the world. Attempting to apply the ethics and standards applicable to one’s home country is fraught with danger, as there will inevitably be unexpected differences.” Before expats get caught in the complexities of where and how to invest, the starting point should be deciding goals
and objectives. Michael Bull, Executive Director at Quilter Cheviot in Jersey, says: “We focus on the clients individually rather than where they are based. That way, we can manage their personal investment risks and meet their expectations when it comes to returns and objectives.”
SPREADING THE RISK Bull’s colleague, Keith Owen, Business Development Director at Quilter Cheviot, based in the Dubai International Financial Centre (DIFC), adds that the main goal for all investors, irrespective of geography, is to spread risk across asset classes. “It doesn’t matter if you live in the UK, Dubai or Timbuktu, diversification should be a major part of anybody’s investment strategy,” Owen says. However, while it might be relatively straightforward for someone in the UK to find a domestic financial provider to build an investment portfolio giving them access to heavily regulated funds and
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Expat investing
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more important to focus on what is relevant to your own goals and ambitions, and select a range of investments that will deliver a good enough result to meet your expectations in the long term. Diversification is key.”
THE RIGHT ADVICE It is also important that investors find a qualified adviser working for a licensed company to provide some redress should things go wrong. However, that may not be as easy as it sounds. There are three regulatory authorities operating in the UAE. The Insurance Authority (IA) covers insurance companies, insurance brokerages and insurance-based products; the Securities and Commodities Authority (SCA) regulates fund managers, investment advisers, traders and stockbrokers; and the Dubai Financial Services Authority (DFSA) regulates financial services conducted in or from the DIFC.
Owen says: “It is very difficult for a financial adviser to provide a holistic service because if you are SCA regulated, you can’t advise on protection products. If you are an IA regulated person, then you shouldn’t really advise on investment products. And you can’t have both licences in one office.” Coupled with the challenges of finding a suitable adviser in the Middle East come issues with liquidity. Owen points out that, should an employee lose their job in the
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trusts, it’s not quite so simple in the Middle East. As Wintour says: “When investing generally, it is important to understand the legal framework hosting the investment, wherever that may be. “In an environment such as Dubai, that has been described as a marketeer’s dream – separating the excellent from the background noise is difficult and confusing. Expats can find themselves spinning with a combination of opinions that are sometimes based on scant knowledge or even wishful thinking.” Wintour recommends “turning down the background noise” and considering strategies that match objectives and deliver on their promises “as opposed to seeking asset classes that promise to blow the roof off”. He continues: “Contrary to the impression given by some promoters of products in the region, it is not necessary to always seek the best performing asset to keep ahead of some game. It is perhaps
Solutions in the Channel Islands allow investors to defer a decision on taxation until they decide where to settle
Expat investing
UAE, they will be required to leave the country within 90 days. Any investments they have may be subject to either heavy tax penalties when they return home, or they could be hit with exit penalties if investors try to withdraw early. Or both. “The reality is that in international markets, if you don’t bring anything to the party it’s time to leave,” says Owen. “Locking into an investment for five years seems unfair as a lot of investors will fall foul of tax when they return to the UK. “Also, a lot of the funds sold in the UAE have a rear-end load on them. So, if I put someone in those products today, they will be hit with an exit penalty.” Wintour says this lack of liquidity proved problematic when the financial crisis hit in 2008 and expats wanted to withdraw from property. He says: “A simple example of not paying attention to detail manifested itself back in 2008 when the financial crisis began to take effect on the global property market. Buyers of off-plan developments who expected to be able to exit incomplete properties found themselves obliged to complete the payment schedule irrespective of the build schedule as the two contracts were mutually exclusive.”
TRIED AND TRUSTED The Channel Islands offers a strong solution for expats looking for security, stability and liquidity. As Wintour says: “A robust regulatory framework that is
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The main goal for all investors, irrespective of geography, is to spread risk across asset classes
forward-thinking sets the islands apart from other international finance centres. “The islands offer fiscal neutrality for non-resident beneficiaries of investment accounts and trusts, which therefore avoids potential double taxation or the ability for assets to grow free from tax if resident in a nil-tax jurisdiction.” Expats saving for retirement might also consider the Channel Islands, particularly if they are uncertain where they will finally settle when they finish work. Wintour adds: “The Channel Islands offer a secure solution to this problem by
allowing expats to save and invest within a legal framework that is independent, secure and has stood the test of time. “Solutions based in the Channel Islands provide an environment where investors can defer a decision on taxation until they decide where they will eventually settle. Only when they draw upon these savings and investments will the tax environment of their residence become relevant.”
MULTI-JURISDICTIONAL OFFER The Channel Islands also have a proven track record in providing multijurisdictional corporate and trust structures, with several firms offering services designed specifically to help clients deal with the challenges of global living. Wintour adds: “The islands have a large and well-qualified professional trust sector, modern trusts legislation and an effective judicial system, which provides a safe haven for family wealth.” However, it is important that expats ensure that firms are sympathetic to their circumstances in the Middle East and have local knowledge and, preferably, some feet on the ground. For expats in the Middle East, the challenges of building a diversified and sustainable investment portfolio are numerous but not insurmountable. As the Channel Islands build their expertise as centres for international finance, they offer a way for investors to save securely, wherever they lay their hats. n
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Advertising feature
It’s time to talk succession… Paul Beale, Tax Director, and Joseph Milward, Tax Manager, at KPMG on the rising importance of succession planning THE PANDEMIC HAS seen many family
businesses face unprecedented turmoil, uncertainty and challenges. At the forefront of many of the discussions we have had with our family business clients has been the impact on their succession plans. In some cases, these have been accelerated, in some deferred and, often, it has been a catalyst for starting the conversation. Looking back to 2019, the STEP Project Global Consortium, in collaboration with KPMG, conducted a global survey, which revealed that around 70% of family businesses did not have a succession plan. Furthermore, only 47% of businesses had any form of emergency plans should the worst happen. Despite some businesses illustrating that the right action was being taken, this still showed a stark gap in the number of businesses that had no ‘plan B’ option at all. To put this into perspective, almost one in every two businesses still lacked the proper internal processes to manage a change in leadership at a time when it really mattered. These statistics were eye-opening at the time and, as the pandemic evolved, it was clear that, along with financial concern, technological constraints and workforce restrictions, what was being realised simultaneously was that succession planning was no longer a long-term project, or the metaphorical can that could be kicked down the road. Instead, succession planning was rapidly becoming a central topic for the management of organisations to consider among the upper echelons of business decision-making. With Covid-19 having such a big impact on business, it was also changing many aspects of our daily personal lives, with leaders not excluded from that rhetoric. Many business leaders, seeing the impact that change was having on the world, are taking a step back and asking themselves questions regarding the appropriate time to step away from the business: if not now, when? Will the business cope with such a seismic change after everything it has been through in the past 18 months? Was the pandemic the last big challenge they wished to face as leader of their business? As the post-pandemic new reality requires fresh perspective, working from home, moving away from congested areas, and flexible time are all things that businesses have generally allowed their workforce to do – so why should
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their leaders be any different. The older generations within the business are keen to leverage these benefits that Covid-19 has provided. However, with the absence of a proper plan, it remains in their direct interest to see that any handover is properly facilitated and executed. All of this is great in theory, especially when you have a ready and able successor lined up to jump in and take the reins from the outgoing generation. But what happens when the expected heir does not want a part in the business? It is well known that the world is becoming more and more interconnected by the day, and despite the slowdown in global travel, it is still a lot easier to migrate from one place to another than it was, say, 50 years ago. People are regularly moving away from their home towns, which can also be the business headquarters in many cases, and this culture shift is affecting family businesses that have relied on the next generation to stay local and follow suit. Today, families are decreasing in relative size when compared with the older generations, and younger cohorts are interested in pursuing different things.
NON-FAMILY TALENT As a result, family businesses must, in many cases, start looking to non-family talent as a means for fulfilment of the roles that they can no longer fill through family members. This opens up another debate as to whether you promote from within the organisation or whether you bring in an external candidate. The impact of such a decision can be felt across the whole business, as sometimes such monumental
change is not always great – especially when a business is flourishing as it is. Another consideration is how this could affect other family members within the business who might not be ready to take control yet, and feel they are having their position potentially undermined by an outsider. Of course, a key consideration in this discussion is open dialogue with the main family and non-family stakeholders. It is critical that the purpose and legacy of the family’s business is defined and protected appropriately; if indeed now is the right time for the creation and/or implementation of a succession plan. As the world begins to consider how to react to the unimaginable consequences of the pandemic, it is more important than ever that family businesses are proactive in protecting their futures. n
FIND OUT MORE
Paul Beale is a Chartered Tax Adviser and a Member of the Association of Chartered Certified Accountants. His areas of expertise include advising on UK residence and domicile of high-net-worth individuals, inheritance tax and estate planning. In addition, he advises on efficient tax structuring, particularly in respect of UK property holding. Contact: paulbeale@kpmg.com Joseph Milward, a Tax Manager at KPMG in the Crown Dependencies, is a Chartered Tax Adviser and a Member of the Association of Chartered Certified Accountants. His expertise lies predominantly in assisting private clients understand the complex tax landscape that faces them, with a focus on advising on family trust and foundations structures. Contact: jmilward@kpmg.com
ABOUT KPMG
The KPMG firms in the Channel Islands and the Isle of Man have combined to create KPMG in the Crown Dependencies. This creates a professional services business of 460 people, locally owned and dedicated to serving the key industry sectors across the three islands.
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Female investing
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Female investing
What women want The Great Wealth Transfer is upon us, with women becoming far bigger players in the world of wealth. So how do women’s approaches to investing and money management differ? And how can Middle Eastern wealth managers ready themselves as the pendulum swings?
Words: Sophie McCarthy
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support the notion that an unprecedented amount of assets are set to be passed on to women. McKinsey reports that, by 2030, American women are expected to control “much of the $30trn in financial assets that baby boomers will possess – a potential wealth transfer of such magnitude that it approaches the annual GDP of the United States”. Boston Consulting Group states that women are adding $5trn to the wealth pool globally every year – outpacing the growth of the wealth market overall. St James’s Place, meanwhile, notes that the wealth held by women globally is expected to grow to $93trn by 2023, up from $77trn in early 2020. Whichever way you look at it, the financial power of women is growing exponentially. “Although there remain many patriarchal societies around the world, things are beginning to change,” says Zoe Cousens, founder of the Women’s Investment Network. “This is becoming
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THERE’S NO SHORTAGE of facts to
Female investing
achieving financial peace of mind is reportedly seven times more important to women than simply accumulating wealth
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more prevalent in regions where women are actually major breadwinners in the financial sector, and also in the Middle East, where Shariah law enables women to possess wealth of their own accord. “These laws give women in the region more ownership of assets, which has led to many more sitting on boards as directors of family businesses in the region.” Lynda O’Mahoney, Business Development Director at Ocorian, concurs. “Traditional roles are changing in the Middle East,” she says. “Women are taking charge of their wealth and are involved in family financial decisions now more than ever before, and this isn’t going to change. “They are also taking up some very senior roles across a number of sectors, supporting peers who are entering the workforce and making money independent of their family.”
O’Mahoney maintains that, as a result, we’re also seeing a shift in the demographic of investors both regionally and globally.
GENDER DIFFERENCE So, what impact are we seeing as a result of this? And in what ways are men and women approaching investing differently? “Men often primarily focus on researching investment performance, whereas women consider many other factors,” O’Mahoney says. “A great deal of the women I have spoken to who are new to investing are keen to get involved in a way that has a positive impact, and to understand how what they are doing is affecting the environment, as well as education and healthcare systems.” She stresses that this isn’t to say men aren’t interested in these factors, but that they are, in her opinion, more focused on
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Female investing
opportunity,” she continues. “Indeed, achieving financial peace of mind is reportedly seven times more important to women than simply accumulating wealth.” An Kelles, a Director at Jersey Finance, cites another interesting distinction – namely that women are more likely to display philanthropic behaviour in order to “enjoy the fruits of their giving”, whereas men “think more about the legacy they leave behind”. Echoing sentiments expressed by both Cousens and O’Mahoney, Kelles also believes women are more likely to put greater stock into societal causes than men.
result-orientated investments. O’Mahoney continues that, in her experience, when it comes to investment decisions, women are more focused on instrumental long-term goals and life events. “Given that women, when dealing with their personal and family wealth, tend to be less focused on the bottom line and more focused on, for example, future family security, their approach tends to be more cautious than that of men. “For some women, they are more comfortable sticking to what they know – especially what has worked for them in the past. Risk-taking in terms of investment can therefore more often be associated with men. “Many reports show that, when women invest, they do a better job than their male counterparts, and that women who trade shares and funds do so better than men,” O’Mahoney adds.
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“Given that women tend to be more risk-averse and cautious, they are unlikely to make compulsive decisions and instead base their choices on facts and proven data. “Women also tend to think in an integrated way, with long-term views – almost always keeping family or personal goals central to decisions.” “Women instinctively take a holistic view of the family and community’s interests, now and in the future,” agrees Cousens. “They tend to view finance as a tool for reaching life and family goals.” This, she adds, makes them ideal champions for ESG causes. “The historical norm of women playing a more nurturing role, harnessing greater interest in doing good and applying values to their financial decisions, is really driving the ESG agenda. “Research suggests women also have a tendency to perceive wealth more as a source of security rather than an
So, what can wealth management firms do with this abundance of insight and learning? And what should they be keeping front of mind when looking to cater for this increasingly important audience? O’Mahoney is of the opinion that wealth managers and advisers will need to be ready for a lot more involvement and participation from women when it comes to investment strategies. “Preconceptions about female investors will need to change – a greater focus on providing quality service and developing long-term relationships needs to be a priority,” she says. Kelles looks to the fact that when women become the decision-maker on investments, they may want to look at matters afresh. “Part of that review may mean a change to the adviser or advisers they inherited.” In fact, according to Blair Duquesnay’s book Women Shall Inherit the Power of the Purse, some 70% of women switch wealth manager within one year of their husband’s death. “They will look to those who appreciate the challenges they face on a day-to-day basis,” Kelles continues. “For example, if they have become the key decisionmaker for investments within a family environment while having other priorities, such as caring for their children.”
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THE NEW WEALTH MANAGERS
Female investing
Men focus on researching investment performance, women consider many other factors
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Kelles is also an advocate for educating women who may be in line to inherit significant wealth. “This could include looking at how the family wealth is structured and what succession plans are in place to ensure a smooth transition from one member to the next,” she says. “Ideas such as regular discussions and updates on family constitutions, or bespoke events for women to help bridge the wealth transition gap and women’s needs, would help satisfy female clients.” Cousens, meanwhile, suggests that the classic positioning of wealth managers will have to change as women look to them for true partnership and, crucially, stronger empathy. “Such a shift is an essential part of what needs to be a broader effort to acknowledge and serve all stakeholders in the wealth ecosystem,” she says. “The Middle Eastern culture places a great emphasis on loyalty and trust. Those who are seeking an expert to assist them with their – and the future generation’s – wealth will wish to establish a strong understanding of their wealth manager’s values, experience and reliability, sometimes for a number of years, before they feel ready to begin a commercial relationship.
“They also like to see a certain commitment to the region. So in my experience, the companies that have a physical presence, even if it’s simply a small representative office, tend to be among those best-regarded.” Kelles adds: “One of the opinions expressed forcefully by panellists at the Jersey Finance Global Conference in July was that women tend to want advisers who empathise with them and understand their lifestyle, ambitions and concerns. “We included a one-hour panel discussion devoted to the subject of ‘women driving wealth management’ at the event and there was general agreement that regardless of gender, advisers simply need to listen to their clients.” “It’s true also that there is a greater focus on diversity and inclusion among female investors, families and other stakeholders, as well as a cultural realignment of values among the next generation,” she continues. “This is driving a shift in attitudes across the sector. “And in direct response to that trend, advisers at wealth management firms need to adjust their mindset if they are to satisfy the demands of female clients.” n
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Ethical investing
Green links Channel Islands firms are helping Middle East investors align their desire for environmental, social and governance credibility with Shariah principles Words: Marco De Novellis
Director for the Middle East, Africa and India at Jersey Finance. Linked to every interaction he is having with investors in the region today, he says, ESG is part of the conversation. The oil-reliant Middle East economies may not seem like typical destinations for investing that take into account environmental, social and governance (ESG) criteria. Yet, in a 2021 survey of Middle Eastern CEOs by PwC, almost one in two (46%) said they aimed to increase ESG investments over the next three years. Another study by the CFA Institute revealed that 94% of retail investors in the UAE are interested in or are using ESG principles. So why is ESG investing on the rise in the region? A major driving force is that leaders and sovereign wealth funds in the Middle East are promoting ESG as a way to diversify their economies and shift away from the reliance on oil and gas. “The UAE and Saudi Arabia, in particular, are working to establish themselves as leaders in sustainability, and that’s trickling down from the decision-makers to consumers, and all the public sector and private sector businesses in between,” Bhana says. ESG is a central tenet of the strategic framework for change Saudi Vision 2030. The Saudi Public Investment Fund (PIF) is establishing an ESG framework to attract foreign investors into the kingdom, which could lead to a debut multibilliondollar bond sale by the end of the year.
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“ESG IS NOW in the mainstream,” says Faizal Bhana,
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Ethical investing
ESG is being promoted as a way to diversify economies and shift away from the reliance on oil and gas
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Ethical investing
The UAE has also launched the Sustainable Finance Framework 2021-2031 to strengthen its enabling environment for ESG investing. And Mubadala Petroleum, owned by the Abu Dhabi sovereign wealth fund Mubadala Investment Company, recently partnered with Italy’s Eni to explore joint investments in the energy transition space in line with its ESG goals. This adoption of ESG in the Middle East mirrors trends in other global markets, forming part of a global drive to tackle climate change, support sustainability and make a positive societal impact. But the rise of ESG is also driven by consumers. “Investors want to grow the value of their portfolio, but they want to do it in a responsible way and be seen to positively contribute to society and the environment,” says Nina Auchoybur, Managing Director for the UAE at Ocorian. This surge of interest from investors, Auchoybur argues, has been accelerated by the pandemic. According to an HSBC survey, 30% of investors in the Middle East (more than the 29% global average) now believe more strongly in the importance of ESG than they did before the pandemic. “We’ve been through two difficult years; we’ve seen the impact on businesses and people. Now, people appreciate that you need to factor in ESG elements to be able to thrive in spite of major disruptions such as Covid-19,” says Auchoybur. The Middle East is also home to a new, younger generation of wealthy individuals – who are more interested in sustainable investing. In fact, in Saudi Arabia, two-thirds of the population is now in the more socially and environmentally aware age bracket of under-35s. This group is more tech-savvy, too – new technologies have made ESG investing more accessible and an abundance of data allows investors and institutions to measure ESG and monitor investments and their impact. “We know that the younger
The financial centres in the Middle East are relatively young – few service providers in Dubai or Qatar specialise in ESG
population is more conscious of ESG,” says Bhana. “Covid has brought inequality and the impact debate to the fore, and there are increasing calls for more transparency on sustainable finance activities. “Governments and financial institutions are looking to provide products, services and structures to meet that demand.”
CHALLENGES AND OPPORTUNITIES Despite this emerging trend and the increased take-up of ESG principles, obstacles remain. Such is the Middle East’s reliance on fossil fuels and oil revenue that any transition away will take time. The many green initiatives now in place have only recently been launched. Integrating ESG into the financial system and into the mindset of the people of the region will be a much longer process. Indeed, while the PwC survey of Middle Eastern CEOs shows progress, the 46% of CEOs committed to ESG still tracks behind the global average. The financial centres in the Middle East are also still
Motivating factors for ESG investors Last year’s HSBC Sustainable Financing and Investment Survey 2020 report for the Middle East asked respondents to prioritise the reasons they care about environmental and social issues. The findings revealed a higher than global average of Middle Eastern respondents citing regulatory requirements; societal expectations; and “believing it’s right to care about the world and society”.
Middle East investors
Global
70% 60% 50% 40%
43% 37%
49% 41%
38%
30% 20% 10% 0%
35%4
7%
58%4
7%
47%
Our clients want us to Society expects it Regulators require it We believe it’s right to care about the world and society It can improve investment returns and/or reduce investment risk
Source: HSBC Sustainable Financing and Investment Survey 2020
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Ethical investing
UNLOCKING ESG’S POTENTIAL One way to unlock the potential of ESG in the region is by bridging the expertise gap. “The Channel Islands have the solid legal framework, and that expertise in fund management, to host ESG-focused funds from the Middle East, while
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A natural affinity between Shariah principles and ESG has contributed to the adoption of ESG in the Middle East
helping the region to unlock the potential of ESG investments,” Auchoybur explains. As international finance centres, Jersey and Guernsey play host to the financial and professional service providers that occupy the crucial middle part of the ESG value chain, enabling the banks and institutions at one end to keep up with demand from investors at the other. The Channel Islands also have strong green credentials, Auchoybur notes, so investors can trust that products and services that claim to be green and sustainable are indeed ESG-compliant. The Guernsey Green Fund (GGF) provides a platform for ESG-minded investors and a source of authentication for ESG-related funds. GGFdesignated funds must meet strict eligibility criteria of green investing and have the objective of a positive environmental impact. The International Stock Exchange (TISE), headquartered in Guernsey, this year launched a sustainable market segment, giving investors a means of independent certification that listed companies meet green criteria. “Jersey’s financial services firms are also clamping down on the mislabelling of sustainable investments so
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relatively young – and there are few service providers in Dubai or Qatar, for example, that specialise in ESG. Another – international – challenge is data. An ESG rating or score is typically compiled from data related to a firm’s conscientiousness for social and environmental factors. “The issue is that there isn’t one set of guidelines,” explains Pete Unwin, Director at IQ-EQ, and who leads the Middle East team in the region. There are hundreds of potential measures and data points that could demonstrate ESG, but there’s yet to be an internationally agreed mutual set of metrics that businesses can strive to attain and that enables investors to compare different investment opportunities. However, the embryonic nature of ESG investing in the Middle East, and the shortage of expertise and infrastructure, also presents an opportunity. “ESG creates a whole new sub-profession within finance,” says Bhana. “Whether you’re a lawyer, accountant or finance director, within every segment of finance there will be job creation. “If you create a sustainable finance system that feeds into the global ecosystem, you have a different revenue stream; you’re almost creating a new sector.” The total market value of ESG investments will exceed $53trn by 2025, according to Bloomberg. If the Middle East can grab a slice of that, there are significant opportunities for economic growth. “Look at the NEOM smart city project in Saudi Arabia,” Unwin notes. “It’s a $500bn project at the forefront of renewable energy. If that’s a success, the inward investment into the region will be phenomenal. If the region can overcome its challenges, it’s primed to lead a global transition into ESG.”
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Ethical investing
Jersey and Guernsey act as conduits for investment into the Middle East as well as investment out
that funds can’t mislead investors,” Unwin says. “It’s about having the infrastructure and those financial vehicles available. So Jersey and Guernsey act as conduits for investment into the Middle East as well as investment out.”
ALIGNING SHARIAH AND ESG Andrew Tually, Counsel in Carey Olsen’s Guernsey corporate and investment funds practice, which advises approximately 75% of the GGF market, has advised on the establishment of two Shariah-compliant fund structures in the past year. There is, he says, a natural affinity between Shariah principles and ESG, which has also contributed to the ready adoption of ESG in the Middle East. “A core tenet of Shariah law is the advancement of the welfare of society and the environment, so that’s where you see a clear alignment between Shariah and ESG investing.” ESG therefore resonates with the personal religious beliefs of Middle Eastern investors. Islamic Finance also champions good governance. Shariah-qualified scholars provide certification on financial products and Shariah compliance is monitored and certified annually. However, while ESG funds follow conventional finance frameworks, an ESG fund is not automatically Shariah-compliant. To become compliant, funds and investment portfolios must adhere to three key principles of Shariah law – the prohibition of: Riba (interest); Gharar (unacceptable risk or uncertainty); and of investments in certain sectors
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including gambling, alcohol, tobacco and weapons manufacturing. Most conventional funds either earn and/or pay interest, which represents a big challenge. “Practically, we see managers establish Shariahcompliant feeder funds or parallel funds that invest into or alongside conventional funds. Such specialised structures exclude the interest-bearing aspects and may also be excused from non-complying investments,” Tually explains. “This permits Shariah investors to gain exposure to funds and asset classes without offending Shariah principles.” Tweaks and alterations are still needed to perfectly align conventional ESG structures with Shariah. Investment managers, Tually explains, should work closely with service providers and Shariah scholars to develop a product that complies with ESG as well as Shariah principles. Even so, the future of ESG investing in the Middle East looks bright. In fact, Tually notes, ESG funds have recently been outperforming conventional investments in some areas. “Tech and healthcare stocks, in which ESG funds typically have an overallocation, have done particularly well in response to Covid.” Whether ESG investing will continue to pay off remains to be seen, but there’s enthusiasm among investors in the Middle East, who want to grow their wealth in line with their religious beliefs and in a responsible way. “It’s a challenge,” says Bhana, “but ESG investing has buy-in from the highest levels of leadership in the region, and that’s why there’s a high chance of success.” n
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City edition PUBLISHING IN june 2022 FOR EDITORIAL QUERIES, CONTACT jon.watkins@blglobal.co.uk FOR ADVERTISING, EMAIL CARL.METHVEN@BLGLOBAL.CO.UK
Digitalisation
Modern families The rapid advance of digital technologies is delivering considerable benefits to family offices worldwide – so how can traditionally run Middle Eastern families adapt to seize the opportunities?
DURING THE FIRST phase of the
pandemic, the impromptu edict for people to work from home posed a significant challenge for some family offices across the Middle East. With many still employing a hierarchical working style, heavily paperbased and dependent on a trail of personal approvals, it was difficult for transactions to take place at all, and important decisions had to be put on hold. “With everyone working from home, if you wanted to make a payment, you couldn’t get the right people to see it or sign off on it,” explains Pete Unwin, Jersey-based Director and family office specialist at wealth management services provider IQ-EQ. “And that affected those making international investments as well. Many of these businesses simply ground to a halt.” It comes as no surprise, then, that ‘going digital’ has risen rapidly up the agenda of family offices across the region. The
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embracing of digital technology within family-based enterprises, which was already under way before the pandemic, has been sharply accelerated. “While many family businesses have historically underinvested in digital, the pandemic has added a new urgency. Three quarters [of family businesses] say that digital, technology and innovation initiatives are a key priority,” reports Adnan Zaidi, Middle East Entrepreneurial and Private Business Leader at PwC, in the foreword to the firm’s Middle East Family Business Survey 2021. In the same survey, 59% of business leaders said they plan double-digit investment in digital transformation over the next three years. Unwin says that while business continuity was the concern at the start of the pandemic, the bigger issue now is to create a digital infrastructure that supports the growing complexity and diversification
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Words: Alexander Garrett
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Digitalisation
Live data feeds are now the norm in the Middle Eastern family office digital world
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Digitalisation
of family offices in the region. If the first step is developing workflow systems that support the operation of the day-to-day business, the next step is being able to support the international investment strategies that family offices are increasingly pursuing.
ACCESSIBLE INSIGHTS An important part is providing a central depository of data, so that the right people can see the appropriate documents wherever they are. “You may just want somebody in the finance accounting team to see if an invoice needs to be paid, but you might also not want that individual to see how much is in the account,” Unwin explains. “So you need the security overlay to segregate information.” At a deeper level, digital systems need to provide asset and risk management, and to cover the complex web of taxation, compliance and reporting issues that come
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with an international investment strategy. “If they choose us as a global service provider, they need to know that if they’ve got companies in different jurisdictions, that’s going to be incorporated in our systems. So they can view this through one portal and they can then make decisions around their asset allocations and what their risks are,” says Unwin. Brian Carey, Director at Intertrust, who was based in the Middle East for some 16 years, says the more progressive family offices there have been making strides with digital technology since the arrival of the internet in the early 2000s, and the level of adoption runs in parallel with the professionalisation of individual family firms. “You had people, often from investment banks, who joined family offices and brought digitalisation with them,” says Carey. “They were already used to the digital [aspect] of the banking and investment worlds.”
What started initially with creating a wealth of reports made up of elaborate Excel spreadsheets has evolved today towards near-real-time data in the most advanced family offices, Carey adds.
NEW GENERATION Digital progress is also being driven by the succession of the next generation within the region’s wealthy families. “Many are educated in the Middle East, and many more are educated in the US or Europe. In either case, they have had much more exposure to the digital age than their parents,” says Carey. “They have embraced digital change technology and the concept of instant messaging, and live data feeds are now the norm in the Middle Eastern family office digital world.” As a result, there has been a proliferation of software products designed specifically for use by family offices. In a study last year, specialist research and benchmarking group Simple identified more than 30
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Digitalisation
The alignment between Shariah and ESG investment principles is another complexity technology can help resolve
packages designed with family offices in mind, each with a different slant on functions such as reporting, monitoring, aggregation and visualisation of data. The ideal solution for any family office is likely to depend on the range of their activities, and especially what types of investment are made. For example, the Dubai-based Majid Al Futtaim Trust – the family office of an Emirati holding company that owns shopping malls, retail and leisure establishments in the Middle East and North Africa – chose a performance and risk management platform from New York-based Imagine Software. It offered a wide range of asset classes and instruments in its portfolio, and the need to drill down quickly to measure different kinds of exposure, such as by currency, sector or issuer. In a case study prepared by Imagine, Ian Galvin, Chief Operating Officer of the Majid Al Futtaim Trust, said: “Imagine
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is the primary driver for identifying our positions, valuations, profit and loss, and, importantly, portfolio returns at all levels. We don’t use a third-party administrator, so we need to have very accurate records – Imagine lets us see exactly where our performance comes from.” Equally important to having the right technology solution is having access to the necessary expertise and professional services to underpin that, adds Pete Unwin at IQ-EQ. “The Channel Islands does have an important role to play in that,” he says. “From a top-level perspective that can include acting as professional trustees and directors, providing the structure and expert administration, ensuring there is economic substance and that management and control takes place in the correct jurisdiction.” However, the prospect remains of greater competition from within the region – with the growing presence of mid-shore service providers that could harness technology to leapfrog those in longer established markets. Carey says the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) have both gone digital, allowing businesses to incorporate online. “In some European countries, you still have to physically submit corporate applications and financial statements, so because of digitalisation they are considered vanguards of technology to the world’s financial centres,” says Carey. “The next step for the Middle East family office is to digitalise the family’s Know Your Customer/Customer Due
Diligence documents. These can be released instantly, completely up to date and already digitally verified, acceptable for the ever-changing requirements of the world’s financial institutions.”
NOT A SOLUTION FOR ALL There are family offices that still have much more traditional, paper-based approaches to doing things. In such cases, the family head – usually the patriarch – retains a tight control over decisionmaking, and would be more likely to discuss business over a cup of coffee than over a team-working app. “When they invest internationally, they don’t necessarily want everyone to know what they own,” says Unwin, “not least because they don’t want to be taken advantage of.” However, when it comes to complying with regulators and tax authorities, family offices have a need to be transparent like everyone else, and digital technology is the way to do that more efficiently. Family offices will become increasingly sophisticated, according to Carey. “Some may become fund managers in their own right, while others partner to establish multi-family offices. “The alignment between Shariah and ESG investment principles provides a further illustration of the complexity that technology can help resolve. “It’s still relatively early days for countries whose wealth was founded as recently as the 1970s, but the technology will get smarter and the lessons of the pandemic will ensure there is no let-up on the path to digitisation.” n
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Directory To advertise in the directory in print or online contact Carl Methven on carl.methven@blglobal.co.uk
Unleash the Power of Automations with Agile Automations Agile Automations specialise in developing bespoke Robotic Process Automations (RPA) and Robotic Desktop Automations (RDA), putting automation at the very heart of your organisation’s infrastructure. An organisation – where employees perform predictable, rule lead, highvolume, transactional processes and data manipulation – will boost their capabilities, increase accuracy, save money and time with RPA. Our robotics act with outstanding efficiency and accuracy, 24 hours a day, while offering enhanced Risk & Governance controls, sometimes eliminating the need for human engagement altogether. At Agile Automations, we do not use any robotics platforms, which allows us to offer a complete, yet flexible solution, for our clients; each automation is bespoke, designed to their unique individual requirements, without any need to compromise. This results in an enhanced Return on Investment.
As a full service Jersey law firm, we are best placed to support our clients no matter their personal or business related legal needs. Led by industry recognised litigator, David Benest, our team of expert Jersey lawyers provide our clients with sound, practical and commercial advice you’d expect from larger Jersey law firms, with the personable and responsive agility of a smaller one. Since establishing in 2016, we have worked with a variety of clients ranging from private individuals, large and small local businesses, and government departments. We are known for being an authoritative voice that cuts through complexities to provide accessible advice without the jargon while maintaining our approachability and high standards of service. Our private client team offer expert advice in helping individuals make key decisions when it comes to preserving their wealth now and in the future. We offer a wide range of legal services which include: Dispute resolution Criminal l Business law l Commercial l Commercial property l Employment l Family law l Residential property l Wills and probate l
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For more information on how we can be of service to you, please visit our website www.bcrlawjersey.com or contact us on: Tel: 01534 760860 Email: enquiries@bcrlawjersey.com
Deloitte is the largest global provider of audit and assurance, tax, consulting, financial advisory, risk advisory and related services, bringing world-class capabilities and highquality services to clients. The company has the broadest and deepest range of skills of any global business advisory organisation and is a world leader in the professional services industry. We advise and deliver for the public sector as well as global and local businesses across every industry. Deloitte employs over 200 professionals in Jersey and Guernsey and is part of Deloitte North South Europe (NSE). Deloitte currently has approximately 330,000 people in more than 150 countries and territories, giving the firm the expertise to solve organisations’ most complex challenges and make an impact that matters. David Becker - Audit Partner, Guernsey D: +44 1481 703 335 davbecker@deloitte.co.uk Jo Huxtable - Tax Partner, Guernsey D: +44 1481 703 308 jhuxtable@deloitte.co.uk Adam Cichocki - Advisory Partner, Jersey D: +44 1534 824 393 acichocki@deloitte.co.uk Martin Rowley - Tax Partner, Jersey D: +44 20 7007 7665 mrowley@deloitte.co.uk Siobhan Durcan - Audit Partner, Jersey D: +44 1534 824 274 sdurcan@deloitte.co.uk Theo Brennand - Audit Partner, Jersey D: +44 1534 824 396 tbrennand@deloitte.co.uk
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Fiduchi is a leading independent financial services company providing solutions to high-net-worth individuals and businesses around the globe. Our independence ensures we have the flexibility to deliver bespoke solutions - that’s what makes us different! Over 25 years, our director-led teams have built long-term valued relationships with clients and their professional advisors, ensuring a pragmatic and trusted approach to their wealth structuring needs. Using the latest technological cloud-based solutions ensures we have the flexibility to deliver timely and innovative solutions that our clients require. Visit our website to see the comprehensive range of services we provide in the following areas: l Private Wealth l Corporate Services l Fund Services l Yacht Services l Employee Services For more information, visit www.fiduchi.com Alternatively, you can contact: Robert Ayliffe - Executive Director Tel: +44 7700 349 750 Heidi Thompson - Executive Director Tel: +44 7797 966 408 Terry Northcott - Executive Director Tel: +44 7797 715 421 Follow us: Dubai / Jersey / London Fiduchi is regulated by the Jersey Financial Services Commission. Full legal, data and regulatory notices are published on our website. Fiduchi® is a registered trademark of Fiduchi Group Limited.
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We are IQ-EQ, a leading investor services group that brings together a rare combination of global technical expertise and deep understanding of clients’ individual needs. We have the know-how and the ‘know you’ to provide a comprehensive range of compliance, administration, asset and advisory services to fund managers, multinational companies, family offices and private clients operating worldwide. We act as a trusted partner to our clients, helping them to invest and preserve their capital in a sustainable and compliant manner. IQ-EQ employs a global workforce of 3,400+ professionals located in 23 jurisdictions, giving us a genuine global reach. We have assets under administration (AUA) exceeding US$500 billion. In the Channel Islands, we have 380 people across our Jersey and Guernsey offices and our expert, director-led private wealth, corporate and fund administration teams work closely with a wide array of international clients as well as their advisers. To find out more and discuss your specific requirements, please contact: Mirek Gruna Chief Commercial Officer, Jersey E: Mirek.Gruna@iqeq.com T: +44 (0)1534 714 486
KPMG in the Crown Dependencies is a leading professional firm that delivers audit, tax and advisory services. Operating across the islands of Guernsey, Jersey and the Isle of Man, it is a standalone, locally led partnership with over 450 members of staff. The combined practice forms a core part of the KPMG Islands Group, made up of International Financial Centres and Overseas Territories spanning a sub-region which extends from Malta to the Caribbean. This grouping works closely with other KPMG practices in major global financial centres such as London and New York, ensuring that clients can benefit from an optimal blend of local and global expertise from KPMG’s network. KPMG is a global organisation of independent professional services firms providing Audit, Tax and Advisory services. It operates in 146 countries and territories with over 220,000 people working in member firms around the world. Find out more at www.kpmg.com/channelislands Contact details: Neale Jehan Senior Partner KPMG in the Crown Dependencies E: njehan@kpmg.com T: +44 (0) 1481 721000
Jacques Vermeulen Chief Commercial Officer, Guernsey E: Jacques.Vermeulen@iqeq.com T: +44 (0)1481 231 941 For more information about IQ-EQ’s global service offering, please visit iqeq.com IQ EQ (Jersey) Limited and IQ EQ Fund Services (Jersey) Limited are regulated by the Jersey Financial Services Commission. IQ EQ (Guernsey) Limited is regulated by the Guernsey Financial Services Commission. IQ EQ Management (Guernsey) Limited is licensed by the Guernsey Financial Services Commission under the Protection of Investors (Bailiwick of Guernsey) Law 1987. IQ EQ Depositary Company (UK) Limited is authorised and regulated by the Financial Conduct Authority of the United Kingdom under firm reference number 481843.
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Ogier provides legal advice on BVI, Cayman, Guernsey, Jersey and Luxembourg law. Our network of locations also includes Hong Kong, London, Shanghai and Tokyo. Legal services for the corporate and financial sectors form the core of the business, principally in the areas of banking and finance, corporate, investment funds, dispute resolution, private equity and private wealth. Ogier has strong practices in the areas of employee benefits and incentives, employment law, regulatory, restructuring and insolvency and property. We are a registered listing agent for The International Stock Exchange (TISE, formerly known as The Channel Islands Securities Exchange or CISE) and frequently advise companies listing on other exchanges whether offshore or onshore.
Building trust in society and solving important problems We focus on three things at PwC in the Channel Islands: assurance, tax and advisory services. But how we use our knowledge and experience depends on what you want to achieve. So whichever one of our 390 staff in the Channel Islands you work with (or 225,000 people across the PwC global network of member firms), they’ll start by asking the following questions: Are you looking to build trust? Give your shareholders more value? Or do you want to do something completely different with your strategy?
We also provide pan-Island legal services for local Channel Islands businesses and individuals.
When we work with you we really listen, to understand you better. We’ll get to know you, your business and your goals. Then we’ll share what we’ve learned to help you get there. We want to deliver the value that you, our clients, our people and our communities are looking for.
Contact:
Talk to us about your issues and aspirations.
Guernsey Redwood House St Julian’s Avenue St Peter Port Guernsey GY1 1WA T +44 (0)1481 721672 E gsy@ogier.com
For further information, please contact:
Jersey 44 Esplanade St Helier Jersey Channel Islands JE4 9WG T +44 (0)1534 514000 E jsy@ogier.com
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John Roche, Partner, Guernsey Phone: +44 1481 752040 Email: john.roche@pwc.com Karl Hairon, Partner, Jersey Phone: +44 1534 838276 Email: karl.hairon@pwc.com
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Digitalising Corporate Services, Trust and Fund Administrators with integrated software TrustQuay was formed from the merger of Microgen Financial Systems and Touchstone Wealth Management to become the global leader in technology for the corporate services, trust and fund administration markets. With 30 years’ experience, TrustQuay serves more than 450 clients and 17,500 users in over 30 jurisdictions, through 9 offices worldwide in key markets including Jersey, Guernsey, United Kingdom, Luxembourg, Singapore and Australia. The corporate services, trust and fund administration market is undergoing unprecedented change, and the need to help firms leverage technology and digitalise their business models to drive innovation has never been more important, not just from a back-office perspective but with regard to client engagement. TrustQuay offers corporate services, trust and fund administration clients in the Channel Islands and worldwide the strongest product range and widest global coverage to help clients maximise efficiencies, reduce costs, ensure compliance and drive new revenue opportunities. We continually invest in our technology and have the highest targeted R&D spend of any provider in our sector. To find out more about how TrustQuay can help you, please visit our website: www.trustquay.com Or contact us at info@trustquay.com
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Data Xxxxxfocus
Transforming for a sustainable future How Middle East family businesses are diversifying, investing and digitising
PwC’s Middle East Family Business Survey 2021 revealed that, while many Middle East family businesses have been hit hard by the pandemic, they remain optimistic that growth will return in the coming months and years, and are looking forward to the future. The research findings revealed:
89%
58%
42%
59%
of Middle East family businesses expect revenue growth in 2022
plan to expand into new markets in the next two years
admit that conflict does occur from time to time
see an opportunity to lead on sustainable business practices
Opportunities to grow PwC’s report also offered guidance for family businesses on immediate actions they can take to help them “secure a lasting formula for success for the generations to come”: Focus on transformation, especially digital
Professionalise family governance
Involve the next generation
Recent events have shown that those who embarked on their digital journey were better placed during the crisis. The 27% of respondents who are not making this a priority and have not made progress will face significant challenges protecting their legacy.
A professional governance structure and a clear process for conflict resolution (preferably involving an independent party) makes business sense, particularly when it comes to family businesses.
Next generation family members will play a vital role in pushing family business forward in policy areas that are essential to their legacy. Younger generations are the driving force behind sustainability and, in family businesses, are looking for greater responsibility.
Communicate sustainability goals and achievements Family businesses are at risk of losing control of the narrative as listed companies claim the ESG agenda for themselves. Family businesses need to learn how to measure and communicate their ESG position and agenda to a wider stakeholder group.
Source: Middle East Family Business Survey 2021; https://www.pwc.com/m1/en/publications/middle-east-family-business-survey.html
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Promoting and protecting investment worldwide Ocorian is a global leader in corporate and fiduciary services, fund administration and capital markets. Our global network delivers customised, scalable solutions providing the support our clients need: how and where they need it. • • •
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Restructuring and Corporate Recovery Our expertise extends to all aspects of restructurings, from consensual workouts to contentious schemes of arrangement. Our team includes some of the foremost names offshore and our multidisciplinary approach enables us to offer a one-stop, costefficient solution that cuts through complexity to get to what really matters. Legal Services British Virgin Islands Cayman Islands Guernsey Hong Kong Jersey London Luxembourg Shanghai Singapore Tokyo
