Professionals from across Jersey’s funds sector including lawyers, administrators, NEDs and compliance specialists, heard from the JFA’s Legal and Technical Sub-Committee this week, at a briefing outlining some of the measures the industry is taking to maintain Jersey’s leading position as a centre for alternative funds.
A number of speakers from the sub-committee, including Chris Patton, Head of Private Equity, Intertrust Group, Simon Burgess, Fund Advisor and Non-Executive Director, and Matt McManus, Managing Associate, Ogier, discussed a range of areas of regulatory and legislative focus for the JFA, including the recent JFSC AML Exemptions Consultation Paper, a JFSC Outsourcing Paper and JFSC Consultation on Senior Management.
The session was hosted by Joel Hernandez, Head of Funds, Mourant, Vice Chair of JFA, and Chair of the JFA Legal and Technical Sub-Committee, who said:
“Our role as a sub-committee is to look at ways to defend and develop our industry from a legal and technical perspective, working with other stakeholders and organisations, to enhance Jersey’s proposition and add value to the funds sector. The fact that so many people joined us for this session reflects the appetite to support the evolution of Jersey’s funds industry, which is fantastic to see.
“The most recent figures for our funds industry were extremely positive, with AUM and AUA reaching record levels yet again. It’s clear though, that there is a huge amount of work being undertaken by the JFA to maintain our position and appeal in a landscape that is extremely competitive and increasingly influenced by international regulatory and compliance pressures – and this is what the session really focused on.
“From looking at our AML/CFT frameworks and how we can keep the cost of doing business with Jersey competitive, to enhancing our Jersey Private Fund regime, as well as honing our ecosystem for virtual assets – there is a lot that the Committee has been working on. On balance, we feel that Jersey remains in a strong position, given the support of the JFA's members and its other partners.”
The JFA’s Legal and Technical Sub-Committee held a briefing this week, outlining some of the measures the industry is taking to maintain Jersey’s leading position as a centre for alternative funds...
The total net asset value of regulated funds administered in Jersey rose by almost £8bn over the first half of 2022 , according to the latest industry statistics.
The total net asset value of regulated funds administered in Jersey rose by almost £8bn over the first half of 2022 whilst the corporate and banking sectors also posted record mid-year figures, according to the latest industry statistics.
According to the most recent quarterly figures to be collated by the Jersey Financial Services Commission (JFSC) for the period ending 30 June 2022, the value of regulated funds under administration increased by £7.7bn (1.7%) compared to 31 December 2021 to stand at £458bn.
The alternative asset classes, including private equity, real estate and hedge, continued to drive growth to now represent 89.5% of total funds business, with private equity and venture capital making up 44% of total funds business undertaken in Jersey. The value of hedge fund business booked in Jersey in particular grew over the past six months, increasing by 14%.
In addition, a total of 556 Jersey Private Funds (JPFs) have now been registered in Jersey since the structure was launched in 2017, according to the JFSC- an increase of 100 (22%) over the past twelve months. Total Assets Under Management (AUM) held in JPFs, which is reported separately to the quarterly figures for regulated funds, now stands at£61.7bn, spanning private equity, venture capital, real assets and other global equities.
Meanwhile, the total value of deposits held in Jersey banks increased by £10.8bn (8%) over the first six months of the year to stand at £144.4bn – the biggest half year increase since 2019. 57% of deposits in Jersey banks were held in foreign currencies.
Corporate activity also remained strong over the first half of the year. There were 35,447 registered companies on the register as at 30 June 2022 – the highest number in the past decade – whilst in the second quarter alone there were 974 corporate registrations, the highest quarterly figure on record.
Commenting on the figures, Jersey Finance CEO, Joe Moynihan, said:
“In a persistently challenging environment, these are really robust figures for our industry. We have seen consistently positive figures and a growth trajectory for our funds industry for some time now, and the past six months have consolidated our position as a leading specialist funds hub in Europe.
“Meanwhile, it’s pleasing to see the appeal of our IFC reflected in impressive figures for our banking and corporate sectors too. Record levels of company incorporations over the past six months and a resilient banking sector underline Jersey’s appeal as a stable, reliable centre, supporting international business and growth as the world looks to rebuild after a period of uncertainty.”
“Particularly as we look to build out our service lines and take our messaging to new markets in 2023, in particular across Asia and the US, these positive figures paint a very positive picture of the role Jersey is playing in supporting high quality cross-border capital flows.”
Mike Johnson, Chair, Jersey Funds Association, added:
“The fact that Jersey has maintained its upward trajectory in 2022 against a backdrop of instability in Europe and a complex post-pandemic fundraising landscape, is a reflection of the high regard in which Jersey is held by managers. The growth of the JPF, five years since it was introduced, is particularly noteworthy. Its success means that today, across its suite of fund regimes, Jersey is administering high quality global fund assets well in excess of £0.5trn, and that figure continues to grow.”
The JFA has named its new-look committee following its recent AGM...
Following its recent Annual General Meeting (8 July), the Jersey Funds Association (JFA) has elected a new-look committee as it continues to champion Jersey's ecosystem for alternative funds.
With outgoing Chairman Tim Morgan completing his three-year tenure, Michael Johnson takes over the role, with Joel Hernandez taking on the position of Vice Chairman. Michael is Group Head of Institutional Services at Crestbridge, whilst Joel is a Partner at law firm Mourant.
The new committee features some continuity whilst also introducing a number of new faces, with Robin Wilson, Sophie Reguengo, Stephanie Hopkins, Clive Spears and John Riva all joining. Remaining on the committee this year are Richard Anthony, Mike Byrne, Steve Cartwright, Ben Dixon, Ben Honeywood, Dilmun Leach, Robert Milner, Tim Morgan, Simon Page, Martin Paul, Tom Powell, Peter Rioda, Ben Robins, Martin Rowley, Sarah Sandiford and Elliot Refson.
At the AGM, outgoing JFA Chair Tim Morgan, who is a Partner at law firm Maples, provided an assessment of achievements and highlights from the past year:
“Jersey's funds industry continues to operate in a fast-evolving market, with regulatory, economic and geopolitical uncertainty continuing to pose challenges – but the fact that Jersey’s funds industry succeeded in reaching new record highs of assets under administration in 2022 and in each of the past three years speaks volumes about the appeal of Jersey’s platform of stability. As ever we need to continue to work hard to underpin this.
“Reflecting on the past three years, there’s no doubt it has been a busy but exciting time to lead the JFA, through a complex period encompassing the implications for Jersey of the effects of Brexit, to the challenges of the global pandemic, to on going enhancements to Jersey’s international standing for tax and regulation. It is a credit to the committee and to the wider industry that Jersey’s funds offering has gone from strength to strength throughout this period. I’m really grateful for the efforts of all those who have given their time to the committee, including Caroline Harrington, who is retiring from her role as secretary of the JFA after many years. We have achieved a lot – from navigating tax and regulatory changes, to integrating ESG into our thinking and supporting cutting-edge training for our members.”
Meanwhile, newly appointed JFA Chairman Michael Johnson added:
“There’s no doubt that the landscape continues to pose challenges. Geopolitical developments have significantly worsened since the increased hostilities in Ukraine, and from a macro-economic perspective, inflation rates, interest rate changes and other economic indicators are pointing to a significantly more challenging economic environment. Jurisdictionally, the competitive environment remains intense and evolving too.
“But there is plenty for Jersey to be positive about. We have a compelling proposition, an industry that is growing at an impressive rate, and more and more managers of substance looking at Jersey to support their cross-border needs. Private equity, venture capital and real assets are at the heart of global economic rebuilding efforts, and we have precisely the experience and platform here to support that and make a positive impact.”
With reference to Jersey Finance's ground-breaking 'Jersey's Contribution to Global Value Chains' report, JFA Chair Tim Morgan writes in Funds Europe magazine, looking at the importance of evidencing the positive global impact of Jersey's funds sector...
Towards the end of last year, Jersey Finance published a ground-breaking report that highlighted the value Jersey’s finance industry adds to global markets and the positive impact the work done in Jersey has around the world.
The ‘Jersey’s Contribution to Global Value Chains’ report explores the redistribution of the value of work done in Jersey – and it makes some significant findings. In particular, Jersey firms intermediate £1.4 trillion (€1.7 trillion) of global capital each year and support £170.3 billion of global economic output.
That activity in turn supports millions of jobs of ordinary people, and accounts for 0.27% of total global economic activity each year. It’s an impressive contribution globally for a small jurisdiction.
Read the full article here.
Jersey Finance launches latest white paper in a series undertaken by IFI Global
Stability, expertise and flexibility have been highlighted as key components of the international fund domicile of the future in a new report published this month by IFI Global and supported by Jersey Finance.
‘The Evolution of the International Fund Jurisdictions’ report forms the latest in a series undertaken by IFI Global with Jersey Finance, with previous reports published over the past two years having focused on fund domiciliation, structuring, and fund governance.
This new report explores the origins of the fund domiciliation industry and how a number of locations around the world with no previous connection to funds, have ended up playing fundamental roles at the heart of the global funds landscape, servicing more than US$16 trillion of fund assets.
The report also explores how those centres, including Jersey, BVI, Bermuda, Cayman, Guernsey, Ireland and Luxembourg, have since evolved and what their past experiences tell us about their future direction. Among the report’s key areas of focus are:
· Key dates, from the establishment of the first expatriate banking operation in Jersey in the 1960s to EU alternative fund regulation in 2018
· The origins of the international funds industry in the 1980s, including the first investment funds offered to expats and the largely Anglo-Saxon asset management industry of the 1990s
· The dawn of alternatives, including the introduction of regulatory measures, the shift towards institutional investors, the heightened focus on governance and substance in the wake of the global financial crisis, and the impact of Brexit
· The future, including the growth of sustainable finance and crypto funds and the importance of first mover advantage when it comes to new investment categories
Commenting on the findings, Elliot Refson, Head of Funds at Jersey Finance, said:
“Given the trends over the last decade or more highlighted in this paper, there’s no doubt that the fund jurisdictions that will be most successful in the future will be those that are stable with strong expertise and infrastructure, and robust but flexible regulatory frameworks. This has really been Jersey’s mantra for the past twenty years, and we’ve seen the fruits of that in the growth of Jersey in recent years as a trusted funds domicile.
“There will undoubtedly be more changes over the coming decades and our focus will remain on staying true to our values and on retaining our position as an integral part of the global fund landscape.”
Simon Osborn, CEO of IFI Global and author of the report, added:
“Fund domiciliation patterns have always been subject to change and there is no reason to believe this will not continue to be the case in future. To understand how the asset management business might develop in the future, it is a good idea to know something about how the international fund jurisdictions, on which this industry depends, are evolving.
“This White Paper touches upon how a few unlikely locations, dotted around the world, got into this business, focuses on what is happening in international fund domiciliation today and explores what may well happen to international fund jurisdictions over the next few years.”
The new research can be viewed and downloaded here.
The total net asset value of regulated funds administered in Jersey rose by almost a fifth over the course of 2021 to reach a new record level, according to the latest industry statistics.
The total net asset value of regulated funds administered in Jersey rose by almost a fifth over the course of 2021 to reach a new record level whilst corporate activity and bank deposits also showed year-on-year growth, according to the latest industry statistics.
According to the most recent quarterly figures to be collated by the Jersey Financial Services Commission (JFSC) for the period ending 31 December 2021, the value of regulated funds under administration increased by £72.1bn year-on-year (19%) to stand at £450.2bn.
The growth is driven by the alternative asset classes, including private equity, real estate, hedge, credit and infrastructure, which now represent 89% of total funds business, with private equity and venture capital in particular increasing by 27% over the year.
Meanwhile, the total value of deposits held in Jersey banking institutions increased marginally, by £1.9bn (1%) to £133.5bnover 2021, with 56% held in foreign currencies.
Corporate activity also remained strong over2021, with levels of company incorporations over the twelve months meaning the highest ever year-end number of live companies on the register was recorded this period (34,523).
Commenting on the figures, Jersey Finance CEO, Joe Moynihan, said:
“Overall, these are positive figures for our industry in what continues to be a challenging global environment for cross-border financial services. The message is clear – investors and institutions value the certainty, stability and expertise Jersey offers in an uncertain landscape.
“The funds industry in particular maintained its strong upward trajectory, with total fund assets in Jersey now topping £450bn. Meanwhile our banking sector has remained stable despite ongoing currency fluctuations, and our corporate sector has been particularly active, reflecting a buoyant picture across the industry. These figures should give us optimism for the year ahead as we continue to innovate and deliver high quality services to global investors.”
Tim Morgan, Chair, Jersey Funds Association, added:
“Our focus as a funds industry is on creating the very best ecosystem for investors and managers, to facilitate the global distribution of capital securely and efficiently. That these figures show a near 75% increase in funds business over the past five years is testament to the fact that investors right across the alternatives spectrum recognise Jersey as a top-tier jurisdiction, offering expertise, innovative structuring options and a no-nonsense regulatory environment that is entirely geared up to supporting their endeavours.”
The total number of registered Jersey Private Funds (JPFs) has surpassed the 500 mark, according to the latest figures...
The total number of registered Jersey Private Funds (JPFs) has surpassed the 500 mark, according to the latest figures, as the structure continues to assert its appeal for flexible alternative fund structuring.
According to the latest quarterly statistics collated by the Jersey Financial Services Commission and published by Jersey Finance, there were 502 JPFs at the end of September 2021, a number that has risen by 38% compared to the same time the previous year.
Launched in 2017, the JPF structure is tailored to the needs of small numbers of sophisticated investors and offers high levels of flexibility, fast-track authorisation and lighter touch ongoing regulatory requirements. Further, the nimble nature of the structure mean it chimes particularly well with the tried and tested private placement route for marketing funds into Europe as well as within the ESG space.
Commenting on the figures, Jersey Finance CEO, Joe Moynihan, said:
“These latest figures show the enduring strength of the JPF, particularly when it comes to private capital co-investment and cross-border institutional alternative fund structuring. By being cost-effective, flexible and swift to market, the structure has genuinely become a go-to vehicle that has, undoubtedly, played a part in the sizeable growth we’ve seen in our funds sector as a whole.”
Speaking at the recent JFA Dinner, Chair Tim Morgan provided an update on Jersey's funds industry...
An ability to remain agile in a changing landscape, deliver innovative solutions and offer a platform of stability are key differentiators for Jersey’s funds industry that are resonating clearly with managers and investors, according to the chairman of the Jersey Funds Association (JFA).
JFA Chair Tim Morgan gave his update at the JFA Annual Dinner recently (23 September), attended by more than 350 funds and wider industry professionals, including an overview of the current funds landscape, the ongoing work of the JFA with its key stakeholders in Jersey, and future opportunities for Jersey’s funds sector. It was the first physical return to events for the JFA since 2019, since when all updates had been provided on a digital basis.
Pointing to the fact that Jersey’s funds industry recorded another new record high of fund assets being administered at the half-way point in 2021 (£436bn), with private equity and venture capital increasing by 21% year-on-year and the number of Jersey Private Funds (JPFs) rising to 456, Tim commented:
“The latest figures show that Jersey’s focus on alternative investment funds continues to provide a stable platform of long-term capital. From the start it was clear that the pandemic was affecting participants differently. Large, well-known sponsors with strong platforms continued to fundraise. Conditions were more challenging for new and smaller investment groups. However, many have in any case proceeded with the raising of successful, small, first funds and club deals, and that correlates with the continued growth in the number of JPFs we have seen. It’s a real endorsement of Jersey’s appeal and expertise.”
In addition, Tim, who is also a partner at the Jersey legal practice of the Maples Group, highlighted the importance of Jersey’s funds industry maintaining momentum in delivering innovative solutions to global investors:
“Jersey has continued to test innovations in digital assets, as well as increased amounts of structures aimed at sustainable technologies and related assets, which is very positive. In addition, significant changes have also occurred in the administration space – increasingly tech is a key component of how services are being provided, which is enhancing how governance, risk management and compliance are managed in practice. Jersey service providers have been impressive in adopting a digital first approach over the past year and this is undoubtedly a key part of our success.”
Meanwhile, Tim also highlighted that shifts in global geopolitics, regulation and competition were providing challenges, with Jersey’s focus on maintaining a perfect ecosystem for alternative funds putting it in a strong position:
“The political environment is volatile – the change in US administration; increased pressures from the EU and OECD in relation to tax; numerous policy initiatives from UK in the post Brexit and post pandemic environment; upcoming elections in Germany and France. All this means that there is a need for continual engagement in relation to Jersey’s position internationally. At the same time, jurisdictionally, the competitive environment is intense.
“However, Jersey’s ability to pivot in an agile manner, in particular between JPFs and more narrowly-held joint venture and co-investment vehicles, is valuable and provides popular, efficient solutions. At the same time, Jersey has an incredibly strong culture of partnerships with the JFSC, government, and other industry elements all working together on areas of opportunity or concern for our funds and wider finance industry. This is a real differentiator for us, as we continue to focus on our core message - that Jersey offers a unique ecosystem to provide a platform of stability in a rapidly changing market.”
Entertainment at the event, which was held at the Trinity Showground, was provided by comedian and writer Jo Caulfield and London-based singer-songwriter and former Jersey Young Musician of the Year Sam Walwyn.
The main sponsor of the dinner was Mourant, whilst silver sponsors were BNP Paribas Securities Services, IQ-EQ, Ogier and PwC, and the champagne sponsor was Carey Olsen.
The latest quarterly figures for Jersey's finance industry show that the total NAV of funds administered in Jersey grew to a new record level of £436.3bn at the mid-year point...
Sustained buoyant private equity activity continued to drive growth in Jersey’s investment funds sector as the total value of fund assets administered in the jurisdiction grew by £26.3bn to stand at a new record level of £436.3bn at the mid-year point, according to new industry data.
The latest quarterly figures for Jersey’s finance industry, collated by the Jersey Financial Services Commission (JFSC) and published by Jersey Finance for the period ending 30 June 2021, show that the value of total funds business booked in Jersey grew by 15% over the first half of 2021.
In particular, the figures show that funds sector performance has been driven by private equity, which has grown by 24% over the half year to stand at £203.6bn. Combined, the alternative asset classes, including private equity, venture capital, hedge, real estate, infrastructure and debt funds, now account for 89% of all funds business in Jersey.
In addition, the number of registered Jersey Private Funds (JPF), a structure designed for small groups of sophisticated and professional investors, grew by more than 50 over the six-month period to reach 456 (up 13%). JPFs hold total Assets Under Management of £78bn – these are not included in the headline quarterly data.
Commenting on the figures, Jersey Finance Deputy CEO, Amy Bryant, said:
“These latest quarterly figures reinforce some important points. First, the fact that corporate activity has remained strong and our banking sector has been resilient despite significant currency movements in an uncertain environment, underlines the robust nature of our industry.
“In addition, the fact that our investment funds sector has shown such impressive and sustained growth – in particular in the private equity and alternatives space – highlights our strengths as a centre focused on putting significant and high quality institutional and private capital to work around the world. Investors and managers clearly recognise Jersey as an IFC that offers specialist alternative fund expertise. That is important not just for Jersey but for global economies as we all look to rebuild in a sustainable way.”
Tim Morgan, Chair of the Jersey Funds Association, added
“These are once again really positive figures underlining Jersey’s reputation as a specialist funds centre. We work tirelessly to maintain the perfect ecosystem for alternative funds - an ecosystem that is straightforward, well-regulated, effective, flexible and driven by genuine expertise - and those efforts are reflected in the ongoing growth we are seeing in the alternative asset classes, particularly private equity. That the JPF continues to grow its appeal across the range of investors from institutional investors through to family offices is also very welcome and demonstrates our ability to innovate to meet the range of needs across the market.”
The full set of quarterly statistics is available here.
In our latest blog, JFA Committee Member and PwC’s Asset Management Leader, Mike Byrne, looks at how Jersey’s alternatives sector can be an engine of growth and a force for good in a rapidly changing world…
Over the past 40 years, the private markets (or alternatives) sector has grown to become a bedrock of high value employment and prosperity in Jersey – the sector now accounts for nearly 90% of funds under administration in the jurisdiction.
As assets under management (AuM) in the private markets sector continue their rapid expansion worldwide, they’re set to play a key role in driving recovery and creating more sustainable and socially inclusive economies both here and across the globe.
The private markets designation brings together private capital (private equity and credit) and real assets (infrastructure and real estate), and this has real relevance for Jersey which has a formidable reputation in private equity and real estate in particular.
As investors go in search of returns that other asset classes may struggle to deliver, private markets are one of the fastest growing areas of asset management globally. It’s a sector that is now by no means niche – it’s fast becoming mainstream.
Reflecting that, earlier this year, PwC published Prime time for private markets: The new value creation playbook, an in-depth exploration of how the sector is evolving and how to capitalise on the potential. According to that report, it is anticipated that private markets AuM will increase by $4.9 trillion to reach $14.4 trillion by 2025 - around 10% of overall AuM worldwide.
Further, in the JFA’s own survey of its members at the end of last year, respondents painted a clear picture of an industry that is looking to grow and diversify, driven by the private markets. In an industry with alternatives at its core, 69% of respondents said they were confident that their business would grow over the next five years, whilst both short and medium term strategic priorities for Jersey’s funds industry remained focused on private equity, real estate, venture capital and debt funds, according to respondents.
As the PwC report highlights, however, this is an increasingly challenging market in which the prizes will be hard won.
· In search of return: with entry multiples so high and economies still fragile, traditional value levers such as financial engineering and cost reduction may no longer be enough to deliver target returns. Forward-looking private markets managers are therefore broadening their value creation lens in areas ranging from strategic repositioning and top-line growth to longer hold and ‘permanent capital’ models.
· Competing in a concentrated market: Institutional investors’ growing demand for multi-asset mandates is making it difficult for smaller, single-asset-focused managers to compete with big, diversified rivals. There’s still room for specialised players with the right capabilities. The firms that are most vulnerable are those that have neither scale nor specialisation. They risk being squeezed out of the picture.
· Keeping pace with changing stakeholder expectations: the other, and in many ways most far-reaching, challenge is the shift in stakeholder attitudes. As environmental, social and governance(ESG) priorities in areas such as health, sustainability and social inclusion come to the fore, ESG performance has become as important as financial returns.
This isn’t just altruism. As pension and sovereign wealth funds’ private markets allocations increase, reflecting the ‘people’s priorities’ will be ever more important in securing large mandates and sustaining scale and growth. Embracing ESG would help private markets managers to reframe public perceptions, cultivate closer affinity with investors and generate new forms of value. Investment opportunities include helping portfolio companies to move towards net zero production. Private markets managers could also help to bridge the funding gap for small and innovative growth businesses and boost infrastructure investment in areas ranging from healthcare to digital communications.
With government coffers drained by the COVID-19 pandemic, the record levels of dry powder at private markets managers’ disposal could make them a vital contributor to recovery and regeneration – a Marshall Plan for the 21st Century. This would need to be weighed against the increased public scrutiny that would come from a more prominent role in socially-critical areas such as small business finance and infrastructure development.
Jersey’s specialist expertise, record of innovation and supportive regulatory environment puts it in a strong position to take advantage of private markets expansion. But just as the sector as a whole must adjust to a changing world, firms in Jersey are working hard on sustaining relevance and where they can take the lead:
· Picking their spot: the most crucial decision is whether to be a scale or niche specialist player. Firms in Jersey are carefully considering what it is exactly that might make business want to come here, and how they can build on their standout capabilities.
· Challenging assumptions: Further questions centre on how to address changing investor demands. The ever-increasing risk of being called out for ‘greenwashing’ is a clear case in point. As a result, governance – the G in ESG – is rightly at the centre of the agenda. Firms in Jersey are deeply aware of the principal areas needing to be addressed, including gauging what investors really want and how to stay ahead of the game – the goalposts are moving all the time.
· Nurturing talent: Firms are committed to addressing the need to deepen skills and talent, including creating more diverse boards and stepping up the recruitment and upskilling of women.
The evolution and expansion of private markets offer the win-win of high value economic growth locally, and an opportunity to help address pressing social and environmental priorities globally.
With so much at stake, Jersey’s funds sector is focused on tracking how investor demands are changing, ensuring it can keep pace, and articulating what it can offer that other financial centres can’t.
A new report by IFI Global, supported by Jersey Finance, has been published, exploring post-pandemic fund domiciliation trends...
The rise of sustainable finance, the impact of Brexit, EU regulation and the fallout of the pandemic all have the potential to shape considerations around alternative fund domicile selection, according to new research published recently by IFI Global and supported by Jersey Finance.
Based on the views of alternative managers, law firms and advisors from across North America, Europe and Australasia, including some of the world’s largest investors in alternatives, the research for this new report – entitled ‘The Future of International Fund Domiciliation 2021’ – was carried out between October 2020 and February 2021.
More information and the full report can be found here.
Latest quarterly figures for period ending 31 December 2020 show stellar performance for Jersey's funds industry, driven by private equity...
The upward trajectory of Jersey’s funds industry continued in 2020 with the value of regulated funds business serviced in the jurisdiction growing by 9% over the year to reach a new record level, according to the latest quarterly statistics.
Figures for the fourth quarter of 2020 (ending 31 December 2020), collated by the Jersey Financial Services Commission (JFSC), show that the net asset value of regulated funds under administration in Jersey grew by £32.4bn annually to stand at £378.1bn. The increase reflects a period of sustained growth for Jersey’s funds industry, with the figure at the end of 2020 rising by more than two thirds (67%) over the last five years.
In particular, the alternative asset classes, which now represent 89% of total funds business in Jersey, continued to prove the engine room of growth, with private equity and venture capital up by 21% year-on-year to £164.6bn. In addition, the number of registered Jersey Private Funds, which are not included in the headline figures, grew by almost 100 over the year to reach a total of 403.
Meanwhile, the figures also show that deposits held in Jersey banking institutions at the end of 2020 stood at £131.7 billion, down 8% year-on-year, a reduction that was heavily influenced by currency movements and global market volatility, with 56% of deposits in Jersey held in foreign currencies.
Corporate activity, meanwhile, was also very strong in 2020, with a record level of company incorporations in the fourth quarter of 2020 and the total number of live companies on the register standing at the second highest level in ten years at the end of the year (33,626).
Commenting on the figures, Jersey Finance CEO, Joe Moynihan, said:
“Against the backdrop of a really challenging year for global markets, this is a positive picture for our industry, and for our funds sector in particular which has again achieved stellar growth to reach new record levels. The resilience and stability Jersey has shown has clearly resonated amongst investors and managers, as they have continued to put their faith in Jersey as a specialist high quality centre for alternative funds. Despite currency movements impacting overall bank deposits, material deposit levels have stayed largely stable and consistent over recent years, while the positive corporate activity we saw in 2020 is a reflection of the health of the industry and our role in supporting cross-border activity.
“Overall, thanks to the collaborative efforts of Jersey’s industry, government and regulator, we are in a strong place at the start of 2021 and stand ready to deliver on our duty as a responsible IFC and support global economic recovery in the months ahead.”
Tim Morgan, Chair of the Jersey Funds Association, added:
“Jersey continues to work tirelessly to create the ideal ecosystem for alternative funds, and these latest figures provide welcome evidence of the appeal Jersey continues to have, in particular in the private equity, venture capital and alternative space, with a number of big-ticket funds coming to market through Jersey over the past twelve months. The fact that almost 100 new Jersey Private Funds have been registered over the year is also hugely positive, underlining both the appeal of the JPF as the go-to vehicle for professional investors but also Jersey’s ability more widely to innovate in the right areas.”
Latest Monterey Insight figures reflect strong growth in Jersey alternatives...
Figures in the recently published, and 26th iteration of, the annual Monterey Jersey Fund Report paint a picture of a vibrant and growing funds sector in Jersey, driven in particular by private equity and venture capital.
The report finds that fund assets serviced in Jersey rose to US$493 billion in June 2020, up 2.5% from 2019, whilst the number of serviced schemes increased to 1,495, up 11.9%.
The private equity and venture capital asset classes accounted for US$325.9 billion of assets for domiciled and non-domiciled funds with just over 950 funds and sub-funds.
Jersey Finance hosted a Masterclass looking at fund domiciliation in a post-Brexit landscape on 4 February 2021. Watch it again here...
Live streamed last week (4 February), the latest Jersey Finance Funds Masterclass, which featured a number of industry and Government of Jersey representatives, explored what lies ahead for the European alternative funds landscape in the wake of Brexit with the transition period having now come to an end. Amongst the themes explored by panellists were the change stemming from Brexit, the review of the AIFMD, the shifting global corporate tax environment and the stability Jersey offers the alternative funds community in light of this period of change.
Watch the Masterclass again here.
Latest figures show ongoing appeal of JPF for cross-border alternative funds...
The total number of registered Jersey Private Funds (JPFs) has grown by almost two-fifths year-on-year, according to the latest figures, as the structure continues to assert its appeal for cross-border alternative fund structuring.
According to the latest quarterly statistics collated by the Jersey Financial Services Commission and published by Jersey Finance, there were 365 JPFs at the end of September 2020, a number that has risen by 37% compared to the same time the previous year.
Launched in 2017, the JPF structure is tailored to the needs of small numbers of sophisticated investors and offers high levels of flexibility, fast-track authorization and lighter touch ongoing regulatory requirements.
Meanwhile, the latest quarterly figures also show that the total value of regulated fund assets serviced in Jersey grew to a new record level of £365.6bn in the third quarter of 2020, up 7% year on year. This was driven by growth in the alternative asset classes, including private equity, venture capital, infrastructure and real estate, which saw growth of 12% over the year.
Commenting on the figures, Jersey Finance CEO, Joe Moynihan, said:
“In the context of the challenging environment for fundraising in 2020, these latest statistics reinforce the appeal of Jersey as a safe location for institutional capital, as investors have sought resilient, stable, robust, transparent and straightforward fund structuring options to continue to generate returns.
“The Jersey Private Fund in particular has become areal success story and, thanks to its speed to market, flexibility and cost-effectiveness, is now perceived as the go-to vehicle for private capital co-investment and cross-border institutional alternative fund structuring.”
Tim Morgan, Chair, Jersey Funds Association, added:
“Whilst other centres have struggled to keep up to speed as the environment has changed so quickly over the past 12 months, the sophisticated eco-system Jersey provides has proven to be hugely attractive amongst investors. The JPF is a key element of that appeal, complementing Jersey’s pragmatic regulatory environment, access to expertise, and global distribution capabilities. These figures reflect the strong position Jersey is in as we move into 2021 and continue to help investors navigate a challenging landscape.”