LONDON (Bloomberg) — The Isle of Man, a British offshore jurisdiction where financial services account for 40 percent of the economy, said it plans to increase the value of investment funds managed there fivefold in three years.The Isle of Man wants to have $100 billion in assets under administration and $50 billion under management by 2010, following the recommendations of an independent report commissioned by the island’s government, it said in an e-mail yesterday.

A commission chaired by Paul Smith, formerly in charge of global fund administration at the Bank of Bermuda and HSBC Holdings Plc, said the Isle of Man should be “the preferred offshore location for the establishment of front and middle-office operations for fund managers currently located in London and in other major financial centres”.

The island should be a “premier location” for listed hedge funds and other closed-end funds, it added.

“We aim for the island to be a one-stop shop location so that funds can incorporate, administer themselves and find domicile here,” said David McGarry, senior partner at KPMG LLP and a member of the commission.

He said this model contrasts with the Cayman Islands, where funds tend only to incorporate and have offices and administrators elsewhere.

According to website IFAonline, key recommendations from the report include:

-- Introduction of a new specialist fund category — with criteria including a $100 million initial subscription; ability to base the management and/or administration in other jurisdictions; no restrictions on investment strategies; and a “light touch” regulatory approach;

-- More focus on the front and middle office functions of London-based alternative fund managers, as well as managers in other key fund centres, and

-- Revised offering to fund managers to include a tailored business proposition for location to the Island, and a set up assistance package.

The report’s recommendations follow on from the recent implementation of the Island’s new package of measures to attract business, consisting of the introduction of zero percent corporate tax, a $100,000 annual cap on personal income tax and the modernisation and streamlining of the Isle of Man Companies Act.