Jersey introduces new scheme to enhance its fund regime

January 27, 2012

Jersey has extended its funds regime through the introduction of the Private Placement Fund to widen the choice available to investors.

Private Placement Funds are closed ended funds available to a limited number of sophisticated institutional or professional investors. Similar in scope to the existing COBO (Control of Borrowing Order) private funds, the new fund offering is designed for ‘fast track’ approval, usually within three business days.

Private Placement Funds will sit within the COBO framework and will complement the existing Expert Fund regime which also provides a streamlined approval process and has helped position Jersey as a leading European centre for alternative funds business.

Geoff Cook, Chief Executive, Jersey Finance Limited

Geoff Cook commented:

“Even in these testing economic conditions, Jersey has seen increasing levels of business in the alternative funds sector during 2011 and our latest figures show 10.5% year on year growth in the net asset value of funds being administered in Jersey.

“With Jersey’s funds industry already well positioned to secure alternative funds business and with signs of further growth evident, it is an appropriate time to offer an even wider choice of sophisticated fund vehicle to meet international demand. The introduction of the Private Placement Fund scheme demonstrates that Jersey is determined to not only remain competitive in the funds arena but will also continue to provide innovative solutions within its range of fund services.”

He added: “Industry representatives led by Mike Lombardi at Ogier and Ben Robins at Mourant Ozannes have consulted closely to help fashion this new fund regime, taking into account the evolving needs of international investors and the changing nature of global regulation.”

Key features are:

  • - The fund is restricted to less than 50 sophisticated, professional investors
  • - It is closed ended and has a minimum investment or commitment level of £250,000 or currency equivalent
  • - A fast track approval process is available provided that the offer document conforms to the applicable content rules and sponsors meet the suitability requirements contained within the Private Placement Fund guide
  • - Each Fund requires a mandated licensed Jersey administrator approved by the Jersey Financial Services Commission
  • - The Offer Document is obliged to include an appropriate form of investor warning.

Jersey will continue to operate its COBO regime also for those specialist private funds which do not fall within the scope of the new Private Placement offer. The new Private Placement Fund is effective and available to investors from Thursday, January 26.

Nigel Strachan, Chairman of the Jersey Funds Association

Nigel Strachan added:

“Jersey’s funds industry, together with the Jersey Financial Services Commission, has been working really hard to create this new Private Placement funds regime, so it’s excellent news that it can now be unveiled. Specifically geared towards limited numbers of professional or sophisticated investors, this flexible regime will offer, provided the fund satisfies certain conditions, a fast track, streamlined authorisation process that we believe will add to the strength and range of fund products in Jersey and provide speed and certainty to launch for investors – essential in today’s market, where arrangers need to react quickly to new market opportunities. With its appropriate regulatory oversight, we expect the regime to be attractive across the alternative asset classes, including real estate, private equity, mezzanine, cleantech and emerging market funds.”