Peter Niven, Chief Executive, GuernseyFinance LBG Private Equity Funds Guernsey - the Alternative

Global growth in Private Equity Value ($bn)Number of funds ValueNumber of funds , YTD Source: Private Equity Intelligence

Guernsey Funds Industry – The Facts Booming fund industry! US$ 200 billion under management Over 600 funds & 1,200 sub-funds 47% growth in funds 2005/06 – dominated by private equity No less than 45 fund administration companies

Most of the world’s biggest private equity investors invest in Guernsey funds Appropriate standard of regulation Fast track authorisation process Specialist private equity expertise Guernsey as a Funds Jurisdiction – The Facts

Location

Politically stable Not part of the EU 50+ years experience in financial services Mature legal system Supportive, highly professional infrastructure UK time zone – Europe – Asia – Americas Favourable tax regime Guernsey Snapshot…..

and… 800 years of fiscal independence Personal tax – 20% (£250,000 cap) % corporate tax No capital gains tax No VAT No Inheritance Tax No tax on disposal of limited partnership interests Tax transparent limited partnerships

Excellent pool of non executive directors Pragmatic, responsive regulators Fully supportive government Channel Islands Stock Exchange Extensive network of support service providers and…

The Channel Islands Stock Exchange set up in I998 Not bound by European Union Listing Directives considerably more flexible in its approach Classified by FSA as a “designated investment exchange” Recognised by the US SEC as a “designated offshore securities Market” Offers a competitive pricing structure The Channel Island Stock Exchange

Has an excellent business reputation Is competitive and innovative Offers a high level of knowledge & expertise Has an excellent infrastructure including IT If all that isn’t enough…

Join this exclusive club…. Alchemy Permira Terra Firma ABN Amro BC Partners Apax Partners Nomura Macquarie Bank Electra Europe Greenpark Capital PPM Access Capital Partners KKR Baring Vostok Polytechnos Hg Capital Coller Capital EQT PAI

Which Jurisdiction for Fund Formation? How do you decide where to base your fund? Bermuda, BVI, Cayman, Luxembourg and the Netherlands… Take advice from your professional Adviser? Make your own decision?

Choosing a Jurisdiction Proximity Transport links Time zone Language

Track record of jurisdiction Recognition by target investors Needs clearly crafted, modern limited partnership and company law Fiscal transparency Dutch AFM recognition Choosing a Jurisdiction

Limited Partnership Structures No stamp duty on transfers of interest Limited partners can take some management role No limit on limited partner numbers Can select legal personality & still be fiscally transparent No disclosure of identity of limited partners

Tax Exempt Companies Protected Cell Companies (“PCC’s”) Independent Cell Companies (“ICC’s”) Other Guernsey Structures

Features of PCC’s Each cell ring-fenced in the event of liquidation PCC’s now being utilised for unique private equity schemes Company can be migrated to Guernsey & assets split into separate cells ICC’s to protect trading between cells

Excellent Support Services Good corporate governance Expert directors Quality corporate secretarial & compliance support Professional expertise Value added service IT

Guernsey Proposed Reform Working party to review the investment fund industry Fundamental changes to system of regulation expected Reduce number & scope of funds requiring regulation Tax reforms in 2008 Outcome likely to underpin Guernsey’s pre-eminent position in financial services

Join this exclusive club…. Alchemy Permira Terra Firma ABN Amro BC Partners Apax Partners Nomura Macquarie Bank Electra Europe Greenpark Capital PPM Access Capital Partners KKR Baring Vostok Polytechnos Hg Capital Coller Capital EQT PAI