Investing in the Channel Islands

Solid investment in Channel Islands’ businesses has proved highly successful for Bailiwick Investments Limited, which this year celebrates its 10th birthday. Names such as Sandpiper CI, Jacksons CI Group, The International Stock Exchange and Guernsey Recycling Group are but just a few companies that have benefited from its investment. Sir Geoff Rowland, the former Bailiff of Guernsey, has also moved from director to chairman – taking over from David Lowe who has been at the helm from the start. Will Green met them at Oatlands in Guernsey, which just happens to be one of the closed-ended collective scheme’s investments.

What was the spur to creating Bailiwick Investments?

David: ‘Jon Ravenscroft, CEO of Ravenscroft, was basically looking around, and saying: “Well there’s no businesses left in the Channel Islands, which local people can invest in. There’s demand for islanders to invest locally but options were limited”.

‘So, apart from Jersey Electricity, there were really no shares that you could go out and buy. So that was the idea behind forming Bailiwick [Investments]. I was chairman of a company called Cadic, which was basically the old Bucktrout shareholders who got together, and there was a lot of money floating about with the sale of CI Traders in the hands of private investors including Cadic. That was really the basis that Jon started Bailiwick [Investments].’

Sir Geoff: ‘The aim of the fund from the outset has been to attain long-term capital growth by investment in a diversified portfolio of investment principally in businesses, property and assets situated, registered, headquartered or managed from the Channel Islands.

‘There is no prohibition requiring that all investments made by BIL must be in the CI and there is one investment in an Isle of Man company and another based in London. Companies in which investments are made are encouraged to develop beyond the Channel Islands as well as within.’

A decade on, what’s your view of the global financial crisis?

David: ‘Bailiwick [Investments] was formed in a storm, in December 2008. When the financial crisis started, we were halfway through setting it up and were looking for shareholders. It may have meant we raised slightly less than we originally hoped, but that’s just me guessing. We raised £25m. on the first tranche of shares.’

Sir Geoff: ‘The growth of the company has occurred during the decade since there was chaos in the international finance system and, unsurprisingly, high volatility in share prices, often triggered by automatic, computer driven sale of shares.

‘BIL was largely immune from the problems thrown up by the crisis because its investments have been largely in the Channel Islands and the Isle of Man, and have been in solid companies serving the communities in one way of another. The investment policy resonated with the needs and investment culture of many Channel Islanders.’

What was the first investment and has it changed over time?

David: ‘It was Legis. When Mourant and Ozannes merged, they had to divest themselves of a trust company as there was a conflict. That was the first meaningful investment we made. It wasn’t called Legis when we bought it, it was part of Ozannes. That would have been in about 2009.

‘What happened in 2008 when it [the launch of BIL] was announced in the paper, we had every budding entrepreneur in Guernsey coming along and saying: “I’ve got this ramshackle old building, would you like buy it and turn it into a block of offices”, which was totally not what we were looking for. Then we got Legis, and that was an extremely good one to get.’

Sir Geoff: ‘The composition of investments has evolved over the decade since incorporation. There is a continual review of possible acquisitions and sales.’

Since BIL was founded, what have been the highlights and key investments?

David: ‘If I had to pick three out, I would go for Jacksons, Guernsey Recycling Group and Legis – and then Sandpiper came along later. Those are the star performers, but they are all good in their different ways.’

Sir Geoff: ‘The return to investors has been over 100% since incorporation if account is taken of six-monthly dividends, exceptional special dividends and share price growth.

You can read the full article in the November issue of Business Brief