Guernsey: the choice for venture capital funds in 2026

Trends in VC fundraising and structuring

A more selective LP market: Fundraising remains tough and inconsistent. Despite signs that there is increasing dry power (overall), LPs remain cautious. Re-ups are being scrutinised, new manager allocations are harder won and many investors are reserving capital for managers with clear differentiation. This favours funds with disciplined target sizes, credible first-close plans, transparent fee and expense structures and jurisdictions, like Guernsey, that do not add unnecessary complexity or cost.

AI, deeptech and defence technology: AI continues to dominate European VC headlines and has attracted a disproportionate share of capital. Defence technology, dual-use technology, robotics, advanced manufacturing, energy infrastructure and healthtech have also gained momentum. Guernsey has always held strategic appeal for private equity and VC managers investing in complex, alternative sectors; which trend continues as the regulator and industry have worked together to attract and support managers focussed on resilience, defence and security sectors. Recent Guernsey examples include Lakestar's Resilience Fund; Hedosophia's Defence Technologies Fund and Spitfire's Strategic Capital Fund. [2]

Rise of the SPVs: An increasing share of promoters are establishing Special Purpose Vehicles ("SPVs") for deal by deal investments – either alongside traditional commingled funds, or instead of them. We think this is a byproduct of tighter fundraising conditions operating alongside a target-rich investment environment. We see promoters with a healthy pipeline of deals prioritising deployment over fundraising by raising smaller, targeted pools for deal by deal investing. This strategy is also popular with promoters holding valuable follow-on rights that can't be exercised by their main funds because investment periods have expired or they've run out of dry powder. These follow-on rights can be rolled into an SPV and offered to new or existing co-investors. SPVs are not regulated as collective investment schemes in Guernsey with attendant savings on regulatory, compliance, and audit requirements.

Further information in relation to SPVs can be found at Guernsey: an ideal domicile for independent sponsors and deal-by-deal structures | Carey Olsen.

Warehouses: Some promoters have taken advantage of Guernsey's speed to market and reasonable, proportionate regulation to establish regulated funds that act as warehouses for onshore funds, i.e. to admit early investors and make seed investments ahead of the launch of onshore products (e.g. semi-liquid funds aimed at ‘private wealth’ investors, which by their nature have significant lead times to licence and launch onshore). The investments and investors in the Guernsey funds are subsequently tipped into the corresponding onshore products at the relevant time.

Guernsey as an alternative to Luxembourg: As above, LPs are becoming more selective and cost sensitive, which is translating into promoters favouring the most cost efficient fund structures. It is no longer a foregone conclusion that an EU promoter needs an EU fund to attract EU capital on a fully-passported basis, with the attendant time and cost implications. Guernsey funds can be marketed into the EU via National Private Placement Regimes ("NPPR"). Independent research shows:[3] 

• The administrative costs of establishing a passported Luxembourg structure and engaging a third party AIFM could easily reach €3 million over the lifetime of a fund, impacting fund and carried interest returns.
• Only three per cent of EU funds are registered for sale in more than a handful of Member States, and the cost of registering a non-EU fund in those Member States is small.
• Distribution pathways for non-EU funds via Article 42 notifications and registrations are tried and tested, and work well.

For many VC strategies, investors are concentrated in a limited number of jurisdictions; NPPR remains a practical and well-understood route to market (as an alternative to a fully passported EU fund). Indeed, we think this is borne out in Guernsey's popularity in the Proskauer Rose LLP data cited above, i.e. perhaps fewer sponsors view an EEA marketing passport as integral to their fundraising. 

For emerging managers, the programme reinforces Guernsey’s broader proposition: a credible, internationally recognised jurisdiction with experienced service providers, fast-track regulatory pathways and a practical understanding of the challenges faced by new fund sponsors. More information about the initiative is available at Guernsey Foundry.