At a Guernsey Funds Forum 2026 event held in London last week, John Godfrey, managing director for public affairs, policy and research at , 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.