WealthBriefing attended the Guernsey Funds Forum 2026 in London last week – “The Next Trillion” – which reflected on the £1 trillion ($1.33 trillion) in assets that Guernsey oversees and examined the future direction of the industry.
As geopolitical tensions continue, the investment case for
defence-related activity continues to gain traction, forcing
wealth managers to change old assumptions.
At a Guernsey Funds Forum 2026 event held in London last week,
John Godfrey, managing director for public affairs, policy and
research at TheCityUK highlighted the
importance of Guernsey Finance,
the promotional agency for Guernsey – home to a £1 trillion
($1.33 trillion) funds industry.
Guernsey Finance has joined TheCityUK’s Defence and
Resilience Group that aims to tackle areas affecting the
UK”s economic resilience, security and defence capabilities,
Godfrey noted.
“Guernsey facilitates about £58 billion of capital to flow
into the UK economy and it benefits all corners of this island.
This is just £2 billion less than the UK’s annual defence budget
which is frankly inadequate,” Godfrey said at the event. “We all
know that defence investment will have to rise in an uncertain
world and must entail a bigger role for private capital.
TheCityUK is working on this in our group. We have identified
areas where the industry can make a difference.”
“Firstly, financing and funding of small and medium-sized
enterprises (SMEs) that sit in supply chains of big defence
primes,” Godfrey continued. “Secondly, attracting more private
equity and debt into the sector to support new startups. Thirdly,
investing in military infrastructure. There is a clear potential
for Guernsey funds that exist in this space.”
Since Russia’s invasion of Ukraine in February 2022, the profile
of defence-related investment, once seen as off-limits in the
likes of ESG portfolios, has risen signifcantly. Deutsche Bank,
ABN AMRO and others have taken moves (see
here). Germany and the EU agreed last year to hike
defence spending, after decades of underinvestment. A number of
investment managers, such as BNP Paribas Asset Management and
WisdomTree, also recently
launched defence-focused funds to capitalise on the new
investment landscape.
Tony Bienstock, co-managing partner at Guernsey-based private
equity fund Spitfire Strategic Capital, highlighted that the
perception of defence spending and defence-focused funds has
improved significantly over the years, and Guernsey has played an
important role in this. “Pension funds didn’t want to invest in
it. It was a horrible area to be in. We were at the cutting
edge of defence and broke new ground with Guernsey and our
defence-focused fund. They showed us what was allowed and what
was not. It’s an exciting and growing area to be in.”
“Guernsey is helping capital to reach areas where it is needed
most, whether that is long-term investment, underserved sectors
or specialist areas such as defence, where access to capital has
become both more constrained and more important,” Barnaby Molloy,
chief executive of Guernsey Finance, (pictured) added.
Coming together
The Guernsey Funds Forum 2026 brought together fund managers,
legal advisors, administrators and industry specialists to
examine the future direction of the funds industry and Guernsey’s
role within it. Guernsey’s position as an international funds
jurisdiction took centre stage at the event, along with the
island’s support for the next phase of global private
capital growth.
“We have recently surpassed £1 trillion in assets under
management and administration across our investment sector – a
significant milestone and one that speaks to the strength,
flexibility and credibility of Guernsey’s offering,” Molloy said.
“A sizeable part of that trillion comprises entities which are
ancillary to funds, including deal-by-deal and club arrangements,
as well as specialist vehicles that sit alongside regulated fund
structures – an area where Guernsey’s specialist expertise and
flexibility continue to stand out.”
“English common law is a huge global advantage, as is stable,
predictable and proportionate regulation,” Godfrey added. “At a
time of turbulent geopolitics, there is a lot to be said for
being calm, reliable and pragmatic. Guernsey remains a magnet for
talent and an attractive place to start or operate a business,
but the value comes from combining this with a nimble and
forward-looking approach to the huge changes sweeping our
industry.”
Guernsey, which is a Crown Dependency of the UK, is outside
the European Union but it is granted access to European markets
through demonstrated regulatory compliance. The island hosts
about £1 trillion in fund and related assets under administration
and manageme. See more about Guernsey Finance here.
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