Reasons for future confidence highlighted at annual dinner
Global trends to increase allocations to alternative assets should give managers confidence in the future of Jersey’s funds industry, according to the chairman of the Jersey Funds Association (JFA).
Speaking at this year’s annual JFA Dinner (21st April) held at the Royal Jersey Showground, Mike Byrne told an audience of over 400 funds professionals, senior politicians and regulatory representatives that moves amongst institutional investors were having a positive impact on the performance of Jersey’s funds industry, with figures for the end of 2016 indicating that the total net asset value of funds under administration in Jersey stood at £260bn, up 15% year-on-year.
Pointing to rising levels of business across the well-established hedge, real estate and private equity asset classes, but also significant growth in emerging areas including debt, credit and infrastructure funds, Mike commented:
“It’s clear that global allocation to alternatives continues to increase, from pension funds, sovereign wealth funds and institutional investors. Figures from Preqin for the first half of 2017, for instance, show that 57% of investors are expected to allocate more to private debt in the coming year, whilst 40% will increase more to private equity, 38% to infrastructure and 24% to real estate funds.
“All four asset classes form the bedrock of Jersey’s funds industry which, against this backdrop, looks in excellent health with levels now at their highest in five years. Jersey’s focus on alternative investment funds has created a very stable platform of long-term capital that is largely insulated from short term market sentiment.”
Meanwhile, Mike highlighted that activity levels across Jersey’s funds community have been very high over the last year with both existing and new funds:
“The fact that a number of new promoters are now using the jurisdiction for the first time is brilliant news, whilst to have some of the highest value funds in the world launching in Jersey is a very powerful global endorsement of the quality of the jurisdiction and its people.”
Looking at the year ahead, Mike suggested that market developments and a sustained focus on regulatory enhancements could present Jersey with some opportunities:
“In light of Brexit, third-country AIFMD passporting has become a political rather than a regulatory issue, which is disappointing, but doubling down on our tried and tested National Private Placement Regime (NPPR) as well as Reverse Solicitation has proven an effective distribution strategy for the types of funds we look after in Jersey. In fact, the uptick we have seen in NPPR is evidence of it being a genuinely attractive alternative to full AIFMD compliance.
“Our continued focus on enhancing our funds regime, meanwhile, is vital, and the reaction to the introduction in March this year of the Jersey Private Funds Regime has been extremely positive, with a strong pipeline of applications already received. The challenge going forward is to ensure we retain the optimum balance between compliance on the one hand and being business-friendly on the other. Competition is ever increasing, as is the level of sophistication of financial criminals, and getting this balance right is key to the continued success of Jersey as a high-quality specialist funds centre.”
The JFA Annual Dinner helped raise in excess of £5,000 for the JFA’s nominated charity, Mind Jersey, and featured comedian Henning Wehn, well known for his appearances on Have I Got News For You, Would I Lie to You, 8 out of 10 Cats and QI, as guest speaker. Lead sponsor for the evening was Mourant Ozannes and Silver sponsors were BNP Paribas Securities Services, Moore, Ogier & PwC, whilst the champagne reception was sponsored by Carey Olsen