Newsroom

JFA News
Friday
21
December 2018

A Positive Outlook for 2019

With the 100-day countdown to Brexit now firmly on, Jersey is finishing 2018 on a real high and there’s every reason to look to 2019 with confidence.
To finish the year with the most recent figures showing that our funds business is at an all-time high, breaking through the £300bn barrier in Q3, is a fantastic achievement. Just as impressive is the performance of the individual asset classes - private equity has grown by 41% year-on-year, hedge by 18%, real estate by 11%, and infrastructure/credit/debt funds by 26%.

In fact, in recent times, we’ve seen some of the largest funds ever raised in Jersey – Softbank’s Vision Fund, CVC Fund 7, and Nordic 9 to name just a few – whilst Man Group, the world’s largest listed asset management firm, opted to establish a presence here.

It’s a challenging environment but the clear evidence is that fund managers in the UK, Europe and markets further afield are putting their faith in Jersey. And they have every reason to do so - as I look back over the past twelve months, I think we can be proud of what we’ve achieved as an industry.

In particular, we’ve seen Jersey assert its position as a centre that can offer seamless market access – and that’s absolutely key in light of Brexit and global protectionist policies more widely. With the likelihood of the UK crashing out of the EU without a deal still hanging in the balance, managers are quite rightly looking to mitigate the impact on their fund structures. Jersey has proved to be a popular choice of jurisdiction for UK managers, offering cost-effectiveness and flexibility through private placement.

Mid-year figures showed that the number of Jersey managers marketing into the EU through private placement rose 23% year-on-year whilst the number of funds being marketed into the EU this way increased by 11% over the same time frame. The expectation is that these figures will continue to rise around Brexit as managers look for certainty and stability.

With that in mind, I was really pleased that the JFA was able to bring to life just how well private placement is working by collating a series of real life case studies this year - it’s proving to be a valuable piece of work.

We’ve also successfully managed to deliver innovations to the market – the Jersey Private Fund, only launched in 2017, has come to the fore as the go-to product for small groups of sophisticated investors. Speed to market has become crucial for managers and the JPF has been able to meet those demands, offering impressively fast regulatory approval - as at June this year, 130 JPFs had been established holding combined total assets under management of almost £20bn. The rate of establishment is so fast, the 200 mark should be passed fairly quickly in 2019.

Whilst the JPF has proven to be an attractive vehicle in itself in 2018, Jersey also made applications for the JPF online only this year, making the process even quicker. It really is revolutionary and a real statement of Jersey’s intent in the digital space as we look to ‘go paperless’ in the years ahead.

We’ve also worked hard this year to make Jersey’s commitment to high standards of governance and substance absolutely clear. In particular, we worked together with Jersey Finance to produce a factsheet outlining our position on the OECD’s BEPS project – the overriding message is that the action points outlined under BEPS have not altered Jersey’s position as a leading, forward-thinking centre for the domiciliation, management and servicing of funds.

It’s actually a year ago this month that Jersey became only the third jurisdiction in the world to ratify BEPS into domestic law, putting Jersey in a better place to respond to it than many other jurisdictions. And fittingly, this December Jersey approved economic substance legislation, further underlining our position as a responsible, high quality jurisdiction.

So what can we expect looking forward to the coming twelve months?

First of all, the high-level trends are right on Jersey’s sweet spot, with global allocation to alternatives continuing to increase. That’s good news right across the private equity, hedge, private debt, real estate and infrastructure asset classes, and there’s a real opportunity for Jersey to provide a home to a growing number of managers, as well as funds, as they look for a stable location to operate from. In 2018, Man Group chose

We’ll see greater global opportunity – UK managers will continue to be a core market for Jersey, but we also have a real opportunity to support managers elsewhere with fund distribution. The Monterey Insight Jersey Fund Report 2018 suggests an increasingly global picture for Jersey’s funds sector already, with the number of Jersey funds with US promoters growing 165% over the past five years. I expect this trend to continue into 2019.

Innovation will remain key – speed to market, flexibility and cost-efficiency will remain vital, and we are in a strong position to satisfy those needs through our ongoing work to deliver both the right products to the market and a digital infrastructure that appeals to managers and investors.

But just as there is opportunity, there is plenty of competition too. In 2019 more than ever, we need to continue to bring the Jersey proposition to life and develop clear and compelling messages.

I strongly believe we have the very best ecosystem for a funds industry – not only does that include having a first-class physical, digital, regulatory and legislative infrastructure in place, it also means having the best people too. Time and again, we hear that service quality is what matters when it comes to jurisdictional selection. Our people are at the very heart of delivering that and will be what continues to set us apart in the year ahead.

With the 100-day countdown to Brexit now firmly on, Jersey is finishing 2018 on a real high and there’s every reason to look to 2019 with confidence.

JFA News
Monday
17
December 2018

Fund administration values break £300bn milestone as Jersey sees global appeal

The value of regulated funds serviced in Jersey has broken through the £300bn barrier for the first time, according to the latest figures to be collated by the jurisdiction’s regulator the Jersey Financial Services Commission (JFSC).

Figures for the third quarter of 2018 (ending 30 September 2018) show that the net asset value of regulated funds under administration in Jersey grew 14% year-on-year to stand at £301.7bn, the highest recorded figure to date.

The statistics also show that all the alternative asset classes, which represent 82% of Jersey’s total funds business, recorded an annual increase of 26%. Specifically, private equity fund values rose by a considerable 41% to £89.6bn, hedge fund values increased by 18% to £56.8bn and real estate funds by 11% to £40.7bn. The combined total of infrastructure, credit and debt funds also showed impressive growth, increasing by 26% to stand at £59.5bn.

The value of assets managed in Jersey Private Funds, which totalled £19.4bn according to the latest mid-year statistics reported by the JFSC, is not included in these quarterly figures.
Meanwhile, these statistics follow the publication of the latest Monterey Insight Jersey Fund Report 2018, published last month, which illustrates an increasingly global picture for Jersey’s funds sector. That report shows that, whilst the number and value of funds with UK promoters have remained consistent over the past five years, the value of Jersey-domiciled fund assets originating from the US has grown by almost 150% and the number of Jersey funds with US promoters has grown 165%. Equally, Jersey-domiciled fund assets with Japanese promoters have increased five-fold over the same time span.

Commenting on the figures, Jersey Finance CEO, Geoff Cook, said:

“The clear evidence is that Jersey is providing an attractive proposition for fund promoters, with all alternative asset classes showing really strong growth over the past twelve months, particularly the private equity sector.

“Meanwhile, the Monterey report confirms that Jersey is gaining real traction as a global hub for cross-border investment, with fund promoters from the US, Asia and Africa viewing Jersey as an expert jurisdiction for alternative fund servicing. The UK remains a key focus for Jersey, and through Brexit we fully expect to see more UK managers looking to Jersey for specialist support. At the same time, though, a growing number of managers beyond Europe are exploring how Jersey’s robust, innovative regulatory framework and specialist alternatives expertise can support them with their global fund distribution, and that’s a fantastic endorsement of Jersey as a jurisdiction.”

The value of regulated funds serviced in Jersey has broken through the £300bn barrier for the first time, according to the latest figures to be collated by the jurisdiction’s regulator the Jersey Financial Services Commission (JFSC).

JFA News
Thursday
22
November 2018

New CGT Rules a 'Positive Outcome' for UK Real Estate Funds

Commenting on the recent publication of the UK Finance Bill (7 November), which included legislation enabling the introduction of new Capital Gains Tax (CGT) measures for non-resident investors in UK property, Mike Byrne, Chairman of the Jersey Funds Association (JFA) said:

“These measures are the result of a period of really positive consultation between the UK authorities and a range of industry stakeholders and, from a Jersey perspective, it is pleasing that the points we would make as a funds industry body have clearly been listened to.”

In particular, the original proposal made as part of the UK’s November 2017 Budget to extend the UK CGT regime to include all disposals by non-UK residents of UK property, raised a number of key concerns. These included the effect they would have on deterring foreign investment into UK property, the potential for multiple layers of taxation within investment structures, and the likelihood of tax-exempt investors suffering tax leakage on their property holdings.

However, the approved rules reflect these concerns and instead create two new elective regimes: a ‘transparency regime’, which will ensure that income-transparent UK property-rich fund vehicles will continue to be treated as transparent for gains purposes, and an ‘exemption regime’, which will enable certain structures to elect to meet additional criteria so that gains by the fund or within its structure will not be taxable, but the fund's investors will be taxed on disposal of their interest in the fund.

Mike continued: “Overall, the measures that have been introduced are a positive and pragmatic outcome. As well as maintaining the UK’s core proposal, the targeted exemptions approach should help address the concerns previously raised and, fundamentally, ensure that the UK real estate market remains an attractive one for overseas investors.

“In particular, the new rules take into account the wide range of investment vehicles which are used for investing in UK property, including the transparent vehicles available through Jersey, such as JPUTs. For this reason, we fully expect that Jersey, which has developed huge experience and expertise and created a highly sophisticated regulatory environment for cross-border real estate investment over many years, will continue to provide a compelling proposition for UK-focused real estate fund structuring. Indeed, the expertise Jersey can offer will be absolutely vital in supporting managers with the new rules and advising them around the options now open to them.”

According to figures from the Jersey Financial Services Commission, the net asset value of real estate assets held in Jersey fund structures was £39.6bn as at 30 June this year, reflecting growth of 78% over the past five years.

Commenting on the recent publication of the UK Finance Bill (7 November), which included legislation enabling the introduction of new Capital Gains Tax (CGT) measures for non-resident investors in UK property, Mike Byrne, Chairman of the Jersey Funds Association (JFA)

JFA News
Monday
12
November 2018

JPF product finds favour across alt asset classes

Mid-year figures from Jersey’s regulator show that the Jersey Private Fund structure (JPF), launched last year, is continuing to show strong appeal across the alternative asset classes.

According to statistics collated by the Jersey Financial Services Commission (JFSC), 130 JPFs had been established by 30 June this year holding combined total assets under management (AUM) of £19.4 billion.

The figures also show that around half of the AUM figure (48%) is attributed to infrastructure, debt and credit funds, whilst hedge funds account for almost a third (29%). Private equity and venture capital funds make up 16% of the total.

The JPF was added to Jersey’s suite of fund structuring options in April 2017, and was introduced to provide institutional and professional investors with a more streamlined and fast-track regime with tailored ongoing regulatory requirements.  

The product offers the ability to establish a fund for up to 50 investors in as little as 48 hours, with the new figures from the JFSC also showing that almost a quarter of established JPFs (24%) have less than 15 investors or offers.

Commenting on the figures, Jersey Finance CEO, Geoff Cook, said:

“This is the first time this set of figures has been published since the JPF was launched last year as a forward-thinking option for sophisticated investors that balances innovation with an appropriate degree of regulatory oversight. The indications are that it is perfectly meeting the needs of a key segment of the alternative investor community who are looking for better co-investment solutions. Firms are reporting, for instance, that the vehicle is particularly popular amongst like-minded family offices who are looking to come together to tap into the burgeoning alternatives market.”

Mike Byrne, Chair of the Jersey Funds Association, added:

“The JPF is essentially mirroring the general growth Jersey is seeing in the infrastructure, debt and credit fund asset classes, which across our funds spectrum grew by 50% over the past 12 months, whilst the JPF is also being well used for hedge, venture capital and private equity funds. Not only does this performance of the JPF reinforce that it offers a much-needed option for small numbers of professional and institutional investors, it also underlines Jersey’s reputation in the alternatives space. We fully expect the upward trajectory of the JPF to continue.”

These figures follow a number of positive developments for Jersey’s funds industry in recent weeks. The publication of the most recent quarterly figures for Jersey’s finance industry showed that the net asset value of funds under administration in Jersey, excluding JPFs, grew by £15 billion during the second quarter of 2018 to stand at £296 billion at 30 June 2018, the highest recorded figure to date.  In addition, Man Group announced last month that it is proposing to incorporate a new Group holding company in Jersey as part of a realignment of its international corporate structure.

Mid-year figures from Jersey’s regulator show that the Jersey Private Fund structure (JPF), launched last year, is continuing to show strong appeal across the alternative asset classes.

JFA News
Wednesday
10
October 2018

Industry Figures Reveal Upbeat Picture for First Half of 2018

The latest figures on the size of the finance industry in Jersey show banking deposits are rising and the value of the funds industry is at a record high.
The net asset value of regulated funds under administration grew by £15 billion during the second quarter of 2018 to stand at £296 billion at 30 June 2018, the highest recorded figure to date, while banking deposits are also higher at £121.2 billion, the most since March 2016 and £5.7 billion higher than in March 2018.

The statistics, collated by the Jersey Financial Services Commission and published by Jersey Finance, for the period ending 30 June 2018, also show that all the alternative asset classes, which are central to the success of the funds industry, have recorded an increase since the start of the year. Private equity fund values rose by nearly £4 billion to £86.5 billion and real estate increased by £2 billion to £39.5. Hedge funds values increased by nearly £4 billion to £54 billion and the combined total of infrastructure, credit and debt funds was nearly £10 billion higher at £59.6 billion.

These latest figures on funds business complement the data issued by the JFSC in the summer, which showed that the number of Jersey alternative investment funds being marketed into the EU through national private placement regimes (NPPRs) continued to increase (up 5% since December 2017) and the number of Jersey registered managers opting to market into the EU through NPPRs under the Alternative Investment Fund Managers Directive (AIFMD) also increased (up 8%).

To add to the encouraging picture, live companies on the Commission register have also climbed since December 2017 by more than 500 to stand at 32,618 companies.

Commenting on the trends, Jersey Finance CEO, Geoff Cook, said: “These latest figures offer clear evidence of the industry’s resilience during challenging times and demonstrate its ability to grow and thrive. It is also worth noting these figures do not include the Jersey Private Funds, a fast track regime introduced in 2017, and as at 24 September 2018, the JFSC had granted authorization to 167 JPFs. This figure represents an increase of 280% since August 2017.  It is certainly a tribute to Jersey’s stability, high regulatory standards and the global appeal of its range of investment structures. These combined strengths, delivered by a skilled workforce, ensure Jersey remains an attractive jurisdiction across a broad range of sectors.

“When reviewing the figures during the first six months of the year, there are a host of positives to acknowledge and, with finance employment figures approaching the highest ever level coupled with more than 50% of business flows now coming from emerging markets, the industry is on a strong footing, while making a vital contribution to tax revenues - something which is good for all of us.

The latest figures on the size of the finance industry in Jersey show banking deposits are rising and the value of the funds industry is at a record high.

JFA News
Monday
17
September 2018

Prospect of instant online approval to boost JPF appeal

Enhancements made last month to the Jersey Private Funds (JPF) regime, making it possible to submit applications online, will significantly speed up the authorisation process and revolutionise Jersey’s funds sector, according to the head of the Jersey Funds Association.

Last month (2nd August 2018), the Jersey Financial Services Commission (JFSC) launched a dedicated online application tool for JPFs, Jersey’s fast-track fund product designed to cater for limited numbers of professional and institutional investors.

The new tool is autonomous, offering suitable applicants the potential for instant approval. Under JPF rules, applications will be made by Jersey-based authorised service providers, who will have an account to use the online tool.

The tool forms part of the JFSC’s e-enablement strategy, with the JFSC also announcing last month (14th August 2018) that all JPF applications made from 1st September onwards would need to be online and that submissions in paper format will no longer be accepted. A number of minor amendments to the JPF Guide were also announced last month to clarify this.

The JFSC is anticipating that all applications and notifications will be paper-free by early 2019.

Commenting on the developments, Mike Byrne commented:

“The JPF has already proven to be a hugely popular fund structure amongst professional and institutional investors, with around 130 having been established in just over a year since its launch, a number being used to target EU investors. The ability to make applications online will undoubtedly make it even more attractive for managers, speeding up authorisation turnaround times significantly and making the whole process more efficient.

“It really is revolutionary for Jersey’s funds industry, particularly in the current market where managers frequently need to bring their funds to market quickly and, ahead of Brexit, are looking for centres than can guarantee them rapid, efficient support. This tool also lays the foundation for future online capabilities right across the funds sector, emphasising Jersey’s focus on innovation and underlining its ambitions in the fintech space.”

As at 30 June 2018, the JFSC had granted authorisation to 128 JPFs, an increase of 190% since August 2017.

Enhancements made last month to the Jersey Private Funds (JPF) regime, making it possible to submit applications online, will significantly speed up the authorisation process and revolutionise Jersey’s funds sector, according to the head of the Jersey Funds Association.

JFA News
Thursday
26
July 2018

Jersey’s private placement regime continues to find favour amongst alternative managers

The number of alternative fund managers choosing to future-proof their EU-focused funds through Jersey continued to grow in the first six months of 2018, according to the latest figures from Jersey’s financial regulator.

Data from the Jersey Financial Services Commission (JFSC) for the period ending 30 June 2018 shows that the number of Jersey-registered managers opting to market into EU Member States through national private placement regimes (NPPR) under the Alternative Investment Fund Managers Directive (AIFMD) rose 8% between January and June 2018 and 23% year-on-year to stand at 161.

Meanwhile, the total number of Jersey alternative investment funds being marketed into the EU through NPPR also increased to stand at 306, representing a 5% increase on the December 2017 figure and an 11% rise since June 2017.

Commenting on the figures, Geoff Cook, CEO, Jersey Finance, said:

“Brexit ‘deadline day’ is now less than a year away and it’s looking increasingly like EU market access will prove to be a key challenge for UK fund managers. Our message is clear – Jersey is ready to play a supportive role in enabling non-EU, including UK, managers to continue to market their funds to EU investors through our tried-and-tested private placement regime.

“These are strong figures for the first half of 2018 and a vote of confidence in Jersey as a future-proof jurisdiction from the alternative management community. We fully anticipate this figure will continue to rise as we approach Brexit.”

Meanwhile, the JFSC has also reported that, as at 30 June 2018, they had granted authorisation to 128 Jersey Private Funds (JPF), a fast-track regime that was launched in April 2017 to cater for limited numbers of professional and institutional investors. This figure represents an increase of 190% since August 2017, with the 100th JPF having been registered in March this year.

Mike Byrne, Chairman, Jersey Funds Association, added:

“The overall indications are that Jersey is continuing to find favour right across the alternatives spectrum, spanning private equity, real estate, hedge, debt and infrastructure. Alternative funds business in Jersey grew 18% over 2017, and we absolutely see this dynamic continuing through 2018.

“The impressive growth in our Jersey Private Fund product in particular is evidence of the jurisdiction’s innovative approach to supporting institutional investors, with the structure often being used for EU-focused funds.

The number of alternative fund managers choosing to future-proof their EU-focused funds through Jersey continued to grow in the first six months of 2018, according to the latest figures from Jersey’s financial regulator.

JFA News
Monday
23
July 2018

UK Managers Can Look to Jersey for Continued EU Access Post Brexit

Coinciding with the publication of the UK government ‘s white paper on Brexit, ESMA issued a public statement earlier this month aimed at UK managers wishing to  submit applications for authorisation in the EU once the UK leaves the EU. Commenting on the statement, Mike Byrne, Chairman of the Jersey Funds Association said:

“Of course, there might well be situations where UK managers need to establish a  full EU operation. However, doing so is only one option and in many cases Jersey is actually well positioned to play a helpful supportive role for UK managers wanting to maintain ongoing access into the EU alternative investor market.

“Private placement is tried-and-tested and is continuing to work well through Jersey. There are now in excess of 150 managers and 300 funds marketing into EU in this way through Jersey and we continue to see a strong pipeline of activity right across the private equity, real estate and infrastructure asset classes in particular. In fact, the EU’s own figures suggest that only 3% of EU funds market into more than three EU markets, so in the vast majority of cases, Jersey can actually provide a perfectly viable and much more flexible, cost-effective solution. We’d certainly encourage UK managers not to panic and to assess all the options open to them as they look to navigate life post-Brexit.”

Coinciding with the publication of the UK government ‘s white paper on Brexit, ESMA issued a public statement earlier this month aimed at UK managers wishing to submit applications for authorisation in the EU once the UK leaves the EU.

Members' News
Wednesday
4
July 2018

Aztec supports Nordic Capital

Leading independent fund and corporate services provider, the Aztec Group, has supported Nordic Capital on the final close of its latest fund, Nordic Capital Fund IX (“the Fund”), at just over €4.3billion.

Domiciled and administered in Jersey, the Fund was heavily oversubscribed, exceeding its target of €3.5billion in just seven months. Focused on European investments, the Fund will invest in five core sectors: healthcare, financial services, technology and payments, consumer retail and industrial goods and services.
Aztec Group supported Nordic Capital with the Fund’s formation and fundraising activities and will provide ongoing administration services to the Fund and its investment structures from its Jersey office.

Aztec Group is one of the world’s largest independent providers of fund, corporate and depositary services, with over 720 employees operating across six leading jurisdictions. Administering over €290bn, the Group provides outsourcing services to more than 170 alternative investment managers, including over 20 leading private equity and venture capital managers in the Nordic region.

Michelle McNaney, Private Equity Director at the Aztec Group, said:

“We’re naturally delighted to be given the opportunity to administer this exciting fund and build on our long-standing relationship with Nordic Capital. The Fund’s over-subscription is yet another exceptionally successful fundraise for Nordic Capital, who continue to demonstrate themselves as a key player beyond the Nordic region. Their success highlights the continued appeal of alternative asset classes within the investor community, particularly when underpinned by a sound investment strategy and an experienced investment advisor.”

Ged Kelly, Managing Director and Head of Fund Operations of Nordic Capital commented:

“Launching and closing a major fund entails a considerable amount of work, which is highly complex in nature and needs to be delivered within a short and often rigid timeframe. Demonstrating their partnership approach and commitment to our business, the Aztec Group supported us through this process and we were confident that they could deliver what was required to ensure a seamless approach for us and our investors.”

Leading independent fund and corporate services provider, the Aztec Group, has supported Nordic Capital on the final close of its latest fund, Nordic Capital Fund IX (“the Fund”), at just over €4.3billion.

Members' News
Monday
2
July 2018

Appointment of Managing Director at Ashburton Investments in Jersey

Appointment of Managing Director at Ashburton Investments.

Click here to view Press Release.

Appointment of Managing Director at Ashburton Investments.

JFA News
Friday
29
June 2018

BEPS, Jersey Funds and Future Certainty

It’s two years ago this month that Jersey became a ‘BEPS Associate’ and ‘Member of the BEPS Inclusive Framework’ at the OECD’s inaugural BEPS discussions (16 June 2016), and a year (8th June 2017) since Jersey became one of the early signatories to the multilateral instrument (MLI) that forms part of the BEPS project.

Moreover, six months ago, in December 2017, Jersey became only the third jurisdiction in the world to have completed domestic ratification of the MLI.

All of this action demonstrates Jersey’s full commitment towards, and active participation in, the development of international tax standards.

The Jersey Funds Association and Jersey Finance have worked closely together to create a useful factsheet for fund managers and advisers, to demonstrate how the action points outlined under BEPS have not altered Jersey’s position as a leading, forward-thinking centre for the domiciliation, management and servicing of funds.

In particular, while the BEPS project has resulted in the introduction of new international tax treaties and legislative change in some jurisdictions, Jersey has remained focussed on supporting managers and investors by providing a clear, stable and certain environment in line with the action points stipulated by the BEPS project.

By working with key stakeholders and retaining a keen focus on the international transparency landscape, Jersey is ready for BEPS and is in a better place to respond to it than many other jurisdictions.

As a result of the limited impact of BEPS on Jersey, funds and their managers, investors and advisers can be certain that Jersey remains a future-proof solution.

It’s two years ago this month that Jersey became a ‘BEPS Associate’ and ‘Member of the BEPS Inclusive Framework’ at the OECD’s inaugural BEPS discussions (16 June 2016), and a year (8th June 2017) since Jersey became one of the early signatories to the multilateral instrument (MLI).

JFA News
Thursday
14
June 2018

Funds Europe publishes 2018 Jersey Report

Leading asset management title Funds Europe has published a special report on Jersey, looking at the jurisdiction's focus on global connectivity, ability to demonstrate high standards of regulation, and forward-thinking approach to servicing the growing alternatives sector.

Read the full report, which features a number of Jersey Funds Association commentators, here.

Leading asset management title Funds Europe has published a special report on Jersey, looking at the jurisdiction's focus on global connectivity, ability to demonstrate high standards of regulation, and forward-thinking approach to servicing the growing alternatives sector.

JFA News
Tuesday
22
May 2018

JFA Chair Highlights Importance of Innovation

Jersey’s focus on the alternatives market has positioned it positively given ongoing strong sentiment amongst allocators, but innovation will remain key to Jersey’s future success, according to the chairman of the Jersey Funds Association.

Speaking at this year’s annual JFA Dinner (11th May) held at the Royal Jersey Showground, Mike Byrne told an audience of over 480 funds professionals, senior politicians and regulatory representatives that Jersey provides “the very best ecosystem for a funds industry”, with figures for the end of 2017 indicating that the total net asset value of funds under administration in Jersey stood at more than £291bn, up 15% year-on-year.

Pointing to rising levels of business across the alternative asset classes, Mike commented:

“Global allocation to alternatives continues to increase, from pensions, sovereign wealth funds and institutional investors, and we are seeing that in Jersey, with ever-increasing allocations to private equity, private debt, real estate and infrastructure. Our latest figures indicate that Jersey’s funds industry is in excellent health.

“However, those figures are only part of the story – they don’t take into account the Jersey Private Fund (JPF). We know that over the thirteen months since the JPF was introduced, 121 have been launched. I’m optimistic that if we were to include JPF data, that would push us clearly through the £300bn mark.

“We’re also seeing a growing community of managers who are fully resident in the island, across private equity, hedge funds, debt, real estate and crypto. These managers are bringing a real depth and diversity to our industry, at a time when questions around substance are never far from the agenda. Vitally, they are also providing some excellent opportunities for further diversity in career choice for our school leavers and graduates.”

Meanwhile, Mike pointed to challenges faced by the industry:

“The industry has faced a number of significant challenges over the past year. Brexit continues to be one area of uncertainty but it has not had the impact on our industry that might have been feared. In fact, since Brexit we have seen some of the largest funds ever raised in Jersey – Softbank’s Vision Fund, CVC Fund 7, and Nordic 9 to name just a few.

“A key question around Brexit has been how we bring to life the Jersey proposition for both EU and non-EU investors. It is vital that we continue to develop clear and compelling messages, in particular in relation to the opportunity afforded by our private placement regime. There are now close to 150 alternative fund managers going to market through private placement in Jersey, with almost 300 funds distributed into Europe through these channels, a 15% year on year increase.”

Looking to the future, Mike emphasised the importance of innovation for Jersey’s success:

“Product innovation remains key to how we stay on top. With that in mind we look forward to shortly welcoming onto the statute books our Limited Liability Company (‘LLC’) and Jersey Registered Alternative Investment Fund (‘JRAIF’) products, which we envisage will help us maintain the momentum we’ve seen with JPF and LLP vehicles.  We must continue to evolve and respond to the world in which we operate. If we can do that I remain confident of the future of the funds industry in Jersey.”

Lead sponsor for the evening was Mourant and Silver sponsors were BNP Paribas Securities Services, Moore, Ogier and PwC, whilst the champagne reception was sponsored by Carey Olsen.

Jersey’s focus on the alternatives market has positioned it positively given ongoing strong sentiment amongst allocators, but innovation will remain key to Jersey’s future success, according to the chairman of the Jersey Funds Association.

JFA News
Friday
4
May 2018

Comment: Jersey Has Vital Role To Play In Buoyant European Private Equity Market

Commenting on Invest Europe’s 2017 European Private Equity Activity Report, published this week, Mike Byrne, chairman of the Jersey Funds Association, believes Jersey has a vital role to play in ensuring both the UK and EU private equity sectors continue to experience an upward trajectory.

He said: “The buoyancy reported in the European private equity space is fantastic news, and reflects a growing appetite that we are also seeing in Jersey amongst investors to allocate increasingly towards the alternative asset classes. From a Jersey perspective, we are clearly keen to see a thriving private equity sector across the UK and wider EU.

“It is particularly interesting that the report highlights that more than 40% of private equity capital flowing into Europe in 2017 came from outside of Europe, with investors from North America contributing 26% and investors from Asia making their highest contribution to date with a 15% share. With 11% coming from the UK, these figures suggest that more than half of private equity capital in Europe post-Brexit will come from non-EU sources. Meanwhile, the report also finds that 47% of private equity managers in Europe are in the UK.

“There is clear growing interest from global investors in European private equity. This reinforces Jersey’s core role in acting as a domicile for many leading European private equity managers and our confidence that Jersey will continue to play a vital role in helping managers and investors bridge the Brexit gap. Jersey can offer a really attractive environment for connecting both EU and non-EU investors and managers with this buoyant market. For instance, Jersey has strong connections to the UK and is well placed to support the significant UK management community, and other non-EU managers, with ongoing access to the EU market. Private placement is working extremely well, with the number of funds choosing this flexible and cost-effective route through Jersey growing 15% year on year. Meanwhile, we also know that post-Brexit around three-quarters of alternative fund assets routed through Jersey will come from beyond the EU, so Jersey has clear credentials as a tried and tested global conduit for the growing amount of private equity targeting the EU.

“It is also pertinent that, according to the report, pension funds contributed almost a third of all European private equity. Jersey’s reputation as a leading centre for institutional investment, managing pension fund assets totalling around £160bn, can stand it in good stead here too.”

Commenting on Invest Europe’s 2017 European Private Equity Activity Report, published this week, Mike Byrne, chairman of the Jersey Funds Association, believes Jersey has a vital role to play in ensuring both the UK and EU private equity sectors continue to experience an upward trajectory.

JFA News
Tuesday
10
April 2018

Blog: Statistics, the Brexit Gap, and the Jersey Solution

JFA Committee Member Elliot Refson takes a look at figures quoted by the European Commission as part of a package of proposed amendments to cross-border investment fund regulations and explores how Jersey can provide a solution to benefit both managers and investors in the UK and EU...

Figures published last month by the European Commission as part of its proposed package of amendments to regulation surrounding the cross-border distribution of collective investment funds made for interesting reading.

By the Commission’s own admission, “only 37 % of UCITS and about 3 % of AIFs are registered for sale in more than three Member States”. Otherwise put, the vast majority of EU-based AIFs are concentrated on three investor markets or less. Sure, an AIFMD passport is the best bet for the 3% of AIFs wanting to market across the EU, but it begs the question: for the vast majority of funds, is an AIFMD passport really the most efficient and cost-effective means of accessing EU investor capital?

For AIFs, private placement is a tried and tested model for distributing into limited numbers of specific markets. It offers flexibility, speed to market, appropriate regulatory oversight and cost-effectiveness. By the EU’s own statistics, therefore, 97% of all EU-focussed AIFs would be most efficiently and cost-effectively marketed from a Jersey base, outside of the full scope of the AIFMD.

It’s why Jersey continues to see strong growth from AIFMs wanting to make use of the regime. At the end of 2017, there were 149 Jersey based AIFM’s marketing over 291 funds into the UK and the EU using the private placement route. This represents three year growth of 304% and 165% respectively, as reported by the Jersey Financial Services Commission.

And there’s a further problem on the horizon - over 75% of all European investment emanates from the UK, the Netherlands and Switzerland. Post-Brexit, only one of those will be a EU Member State, and there is no guarantee that UK managers will qualify for the AIFMD passport, restricting their ability to market in the EU. It also means that EU AIFMs will be restricted in marketing into the UK. Again, Jersey can provide the solution here, having good relations with all three of those markets.

Which is why we fully expect to see strong sustained interest in private placement through Jersey in the lead up to Brexit, with AIFMs establishing either a full or hosted presence in Jersey that can support them in bridging the gap between the UK and the EU, enable them to market into both via private placement, and ultimately generate better future returns for investors.

JFA Committee Member Elliot Refson takes a look at figures quoted by the European Commission as part of a package of proposed amendments to cross-border investment fund regulations and explores how Jersey can provide a solution to benefit both managers and investors in the UK and EU...

JFA News
Tuesday
20
March 2018

Private equity drives value of Jersey funds business to record levels

The value of regulated funds being administered in Jersey rose to a record level of almost £300 billion at the end of 2017 driven primarily by a rise in private equity business, according to the latest figures to be collated by the Jersey Financial Services Commission (JFSC) and published by Jersey Finance.

In the final quarter of 2017, the total net asset value of regulated funds being serviced through Jersey rose by 10% over the quarter and by 12% year-on-year to stand at £291.1 billion (as at 31 December 2017), the highest value ever recorded.

This growth was driven by the alternative asset classes, which increased annually by 13% to represent more than three quarters (77%) of Jersey’s total funds activity. Within the alternative asset classes, private equity fund values performed particularly strongly, rising by almost a third year-on-year (30%) to stand at £82.7 billion – the second consecutive year private equity has risen by that level. Hedge fund values increased by 6% to £50.7 billion, real estate rose 2% to £37.5 billion, and the combined total of infrastructure, credit and debt funds rose by 7% to stand at £50.6 billion.

Commenting on the figures, Jersey Finance CEO Geoff Cook said: “These are clearly very encouraging figures for 2017. On a macro level, these are uncertain times but the indications are clear – Jersey is seen as a forward-thinking jurisdiction that can provide first rate standards of regulatory oversight, that is highly focused on supporting alternative fund managers, and that can offer an effective platform for generating better returns. All that is proving an attractive proposition for managers and investors looking for stability and future certainty.”

Mike Byrne, Chairman of the Jersey Funds Association added: “Over the past 12 months, Jersey has continued to work closely with the alternative fund management community, and these figures are a reflection of that hard work. Some of the largest private equity funds brought to market last year were structured through Jersey and we continue to see managers selecting Jersey to access both EU capital through private placement and the key UK investor market.  

“In addition, more than 100 Jersey Private Fund structures have also been established in less than a year since launch and their value is not captured in these regulated fund figures, so it’s clear there is real momentum in Jersey’s funds industry at the moment. With asset managers expected to substantially increase their allocation in alternatives over the coming months, we are extremely confident in the future of the industry.”

Trends in alternate fund structuring, institutional investor behaviour and access to EU investors post-Brexit are all themes to be explored at this year’s Jersey Finance Annual London Funds Conference to be held at 8 Northumberland Avenue on 24th April 2018.

The value of regulated funds being administered in Jersey rose to a record level of almost £300 billion at the end of 2017 driven primarily by a rise in private equity business, according to the latest figures to be collated by the Jersey Financial Services Commission (JFSC).

JFA News
Monday
5
March 2018

100 Up for Jersey Private Funds

The Jersey Financial Services Commission (JFSC) has reported a sustained strong uptake in the Jersey Private Fund (JPF), with 100 structures being formed less than one year since its launch.

The 100th JPF was registered by the JFSC last week (2nd March), underlining the interest in the product since it was launched in mid-March last year.

The latest addition to Jersey’s suite of fund structuring options, the JPF was introduced to provide institutional and professional investors with a more streamlined and fast-track regime with tailored ongoing regulatory requirements, under which funds for up to 50 investors could be established in as little as 48 hours.

By providing a more flexible and versatile framework, the JPF has markedly improved the speed and ease with which funds marketed to professional investors can be established, whilst at the same time ensuring continued compliance with international standards by requiring the appointment of a Jersey-based administrator.

The JPF is also available to managers seeking some vital certainty in marketing their funds into Europe through National Private Placement Regimes (NPPRs).

Commenting on the 100th registration of the JPF, Geoff Cook, CEO, Jersey Finance, said:

“We’re focused on providing forward-thinking solutions for the alternative funds community to ensure their future success, and the JPF is an example of that. Our excellent reputation as a specialist funds centre is based on our ability to provide genuine speed to market and expertise as well as appropriate regulatory oversight. The clear evidence is that the prospect of 48-hour authorisation for funds with up to 50 investors is playing out well amongst fund managers and cementing our position as a market leader.”

John Harris, Director General, JFSC, added:

“The 100th JPF approval marks a successful and welcome milestone in the positive development of Jersey’s fund offering. The encouraging market take up of the JPF since its launch in 2017 strongly suggests the right balance has been found between product innovation on the one hand and on the other proportionate regulatory treatment that works with such innovation whilst still delivering an appropriate level of investor safeguards. The JFSC is pleased to play its part in this clear success story.”

Pointing to the fact that the majority of JPFs are newly created fund vehicles, rather than conversions from existing structures, Mike Byrne, Chairman, Jersey Funds Association, said:

“In less than a year, the JPF has really come to the fore as the go-to product for alternative fund structuring, right across the private equity, real estate, infrastructure and debt and credit fund asset classes. It’s particularly pleasing that the vast majority of JPFs are brand new funds – indeed, some of the largest funds brought to market globally this year have been structured as JPFs. It’s a really positive indication as to the future health of our funds industry, and we fully expect this upward trajectory to continue.”

The Jersey Financial Services Commission (JFSC) has reported a sustained strong uptake in the Jersey Private Fund (JPF), with 100 structures being formed less than one year since its launch.

JFA News
Tuesday
27
February 2018

Blog: Jersey, boosting global prosperity by maximising pension fund returns

It is uncontroversial that tax-exempt investors (pension funds, endowment funds, sovereign wealth funds), are spared local taxes to maximise the return for their tax-paying beneficiaries.

Those local exemptions are lost, however, where tax-exempts invest cross-border, which could discourage international investment, prejudicing returns from high-growth regions and risk diversification. The solution presents itself in tax-exempts investing internationally through a tax neutral investment platform in a specialist domicile like Jersey.

The debate around the use of lower tax centres raises the question "why do people invest in offshore funds?". The answer is simple: for alternatives, they're best in class. Expert domiciles like Jersey provide the optimum (regulatory, capital efficiency, cost, tax and service) environment for alternative investment structuring, offering mature expertise and higher returns.

This attracts "best in class" managers who produce the best returns for their tax-exempt investors. Monterey Insight statistics for 2017 showed a healthy 14.7% annual increase in AuMs in Jersey funds, with private equity and venture capital strategies (53%) and real estate strategies (20%) representing a significant share.

The need for tax-exempt exposure to alternatives has been driven by two recessions, budget challenges, the demographic shift and a long period of low interest rates: traditional pension investments in government securities, investment-grade bonds, blue-chip stocks and fixed-income strategies have been bolstered by allocations to alternatives to provide better overall returns, diversify portfolios, add inflation protection and keep return assumptions relatively constant, as returns on "less risky" investments have declined.


Private Equity

On recent averages, public and private sector pension funds have allocated just over 4% of their investable pool to private equity, which has delivered an 8.3% median net IRR over the past decade for public pension funds vs. 5.3% for their total portfolio.

Such is private equity's appeal, investors are struggling to reach their target allocations to private equity as 94% of LPs want to maintain or increase their allocations (Sources: Preqin and Bain Global Private Equity Report 2017). Private equity also offers tax-exempts long-term strategies which mitigate volatility risk and provide in-built diversification across portfolio companies and an ever-increasing range of geographical and sector strategies. 2017 saw the launch from Jersey of Softbank's (largest ever) Vision Fund and CVC Fund VII - funds of real global consequence.


Real Estate

Similarly, private sector pension funds constitute 19% and public sector pension funds 15% of the institutional investors in private real estate funds - more than any other investor type. Higher risk, value-added, real estate strategies are used by 49% of private and 60% of public sector pension funds.

Recent real estate fund performance has been strong, with annualised returns of 14.9% over last three years and 93% of investors happy with their returns. (Source: Preqin). Private real estate funds provide tax-exempts with portfolios combining capital appreciation and a rising stream of inflation-adjusted income, to balance out the ups and downs of the securities markets, and they provide marginally increased liquidity versus real assets, whilst allowing passive investment.

Jersey has long hosted real estate structures channelling tax-exempt investment into UK property and infrastructure, whether industrial parks, office blocks, apartments, retail complexes or student accommodation (eg the Malaysia Employees’ Provident Fund co-investment in Battersea Power Station project).

This all demonstrates how Jersey boosts global growth and prosperity by facilitating secure and efficient cross-border investment and maximising pension fund returns.

It is uncontroversial that tax-exempt investors (pension funds, endowment funds, sovereign wealth funds), are spared local taxes to maximise the return for their tax-paying beneficiaries.

JFA News
Friday
16
February 2018

Uptick in fund managers choosing Jersey private placement regime

A growing number of Jersey-registered fund managers are opting to future-proof their strategies and market into Europe through national private placement regimes (NPPRs) under the Alternative Investment Fund Managers Directive (AIFMD), according to the latest figures from Jersey’s regulator the Jersey Financial Services Commission (JFSC).

As at December 2017, 149 alternative investment fund managers (AIFMs) had been authorised in Jersey to market into Europe through NPPRs, up 17% compared to December 2016, clearly highlighting that the use of private placement continues to work well as a means of marketing funds into the EU.

Over the same period, the total number of Jersey alternative investment funds (AIFs) being marketed into Europe through NPPRs also increased significantly to stand at 291, representing a 15% year-on-year increase.

In addition, the JFSC has now authorised a total of 31 depositaries in Jersey under AIFMD, a figure that has risen 7% over the year.

Commenting on the figures, Geoff Cook, CEO, Jersey Finance, said:

“We’re continuing to work together with the fund management communities both in and outside of the EU, so it’s pleasing to see such a strong uptake of Jersey’s tried-and-tested private placement regime. Five years on since AIFMD was introduced, it’s a route that is proven to work, providing alternative managers with a clear, effective and future-proof means of accessing EU investor capital.”

Mike Byrne, Chairman, Jersey Funds Association, added:

“We believe that Jersey is extremely well positioned to play a positive role in supporting alternative managers right across the private equity, real estate, hedge, debt and infrastructure asset classes, particularly against a Brexit backdrop.

“Whilst these latest figures reinforce that Jersey has a key role to play in giving non-EU managers, including those in the US, Asia and soon the UK, with a means of marketing into Europe, we are also seeing EU managers structuring through Jersey to tap into the vital UK market.  In doing so, we are enabling them to get on with generating good returns for investors – something that is in everyone’s interest.”

The use of private placement as a means of accessing EU capital in the context of Brexit will be one of the issues to come under the microscope at the 2018 Jersey Finance Annual London Funds Conference later this year (24 April), which will also examine how market trends, shifts in regulation and protectionist movements are challenging and shaping the global funds industry.

A growing number of Jersey-registered fund managers are opting to future-proof their strategies and market into Europe through national private placement regimes (NPPRs) under the Alternative Investment Fund Managers Directive (AIFMD).

Members' News

Mourant remains market leader for Jersey Funds

According to the independent Monterey Fund Report 2018, the Mourant Funds team has once again been named the leading legal adviser in Jersey's funds industry, a position now held for 19 consecutive years. In the last year the team advised on over 46% of all funds in Jersey by market share of assets, made up of 791 funds in total with an overall value of US$361bn. The report also highlighted that fund assets serviced in Jersey overall had risen to US$411.1bn at the end of June 2018, up 18.7% from 2017.

According to the independent Monterey Fund Report 2018, the Mourant Funds team has once again been named the leading legal adviser in Jersey's funds industry, a position now held for 19 consecutive years.

Members' News

Mourant advise Invision on the launch of its sixth buyout fund

Mourant have recently acted as Jersey counsel on the launch of Invision VI, a Fund sponsored by Invision AG, a respected mid-market private equity firm active in the DACH region, originally established in 2000.  The fund is a buyout fund, established as a Jersey expert fund, to invest in companies in Germany, Austria and Switzerland. The Fund achieved over half of its target commitments of €375 million at its first close.  Partner Daniel Birtwistle and Senior Associate Matt McManus led the Mourant team. The fund will be administered by Moore Management.

Mourant have recently acted as Jersey counsel on the launch of Invision VI, a Fund sponsored by Invision AG, a respected mid-market private equity firm active in the DACH region, originally established in 2000.

Members' News

Ogier assists Index Ventures on its $1.65b fund raise

Ogier has acted as Jersey legal adviser for Index Ventures in relation to the establishment of Index Ventures Growth IV, which has raised $1 billion to invest in later-stage, growth rounds, and Index Ventures IX, which recently closed at €650 million to put into earlier rounds for smaller start-up companies.

This latest $1.65 billion from Index is a significant increase in fund size on its previous growth and venture fund close (in 2016 it raised $550 million for venture and €650 million for growth), which will enable Index Ventures to take advantage of increasingly sophisticated and international start-ups.

The funds are expected to split their investments between the US and Europe, and have again been backed by pension funds, college endowments, funds of funds and non-profit organisations.

Partner Niamh Lalor led the Ogier Jersey team assisted by senior associate Joanna Christensen, counsel Sophie Reguengo and associate Dan Whalen.
Niamh Lalor said: "The successful fund raising demonstrates Index Ventures' position as a leading venture capital group and is another example of the high calibre of fund managers that continue to choose Jersey to domicile their investment funds.
"We were delighted to once again be able to assist a long standing client and to work alongside Ropes & Gray as lead counsel and Travers Smith."

Ogier has acted as Jersey legal adviser for Index Ventures in relation to the establishment of Index Ventures Growth IV, which has raised $1 billion to invest in later-stage, growth rounds, and Index Ventures IX.