Our Masterclass on private equity and distribution was this year held as a live-streamed virtual event.
The Masterclass is ideal for anyone associated with the private equity industry, cross-border fund raising or distribution – including managers, fund lawyers and fund tax advisers – to hear from our expert panel as they take a deep dive into the core issues driving the industry, and shine a light on what the future has in store.
Event Summary: Experience and Global Expertise Vital in Modern Alternatives Landscape
In tandem with a focus on digital adoption, the growing alternatives sector is set to be driven by robust governance, specialist expertise and strong relationships, according to panellists at the most recent Jersey Finance Funds Masterclass.
Live streamed last week (19 November), the event, which was focused on private equity and distribution, explored some of the key trends shaping the private equity space against the backdrop of Brexit and the coronavirus pandemic.
In a panel session moderated by Michael Johnson, Group Head of Fund Services at Crestbridge and Vice Chair of the Jersey Funds Association, panellists discussed how investors were focusing like never before on regulatory and compliance capabilities, and were looking for specialist support from domiciles to help them navigate a period of unprecedented complexity.
Michelle McNaney, Co-Head of Private Equity at Aztec opened up discussions by painting a positive picture of the current state of private equity in what has been a challenging year:
“Despite the pandemic, private equity is still set to reach new heights this year with GPs keen to crack on with fundraising in a remote environment,” she said. “This upward growth reflects the veracity and tenacity of the private equity industry.”
“Alongside that, we’ve certainly seen a spike in both the volume and detail of queries as operational due diligence has come to the fore. In that context, there continues to be sustained interest in Jersey for structuring purposes, due to the stability and certainty it offers as a jurisdiction.”
Peter Rioda, independent non-executive director, added that the maturity of Jersey’s private equity ecosystem was positioning it strongly in this environment.
“Jersey has decades of experience in servicing and managing private equity,” he said. “That level of experience is now really paying off. Jersey is a natural home to private equity and as a result is set to really benefit from the greater appetite in the asset class we are now seeing.”
Expanding on the new virtual fundraising environment from a manager’s perspective, Ged Kelly, Head of Fund Operations at Nordic Capital, pointed to a fund launch he had been involved in through Jersey in April, just as lockdown restrictions were coming into play:
“We closed in six months, and the positive experience was that investors were really ready to commit to working with GPs despite the remote conditions. The key was doing a lot of preparatory work in advance of the fund launch.”
Expanding on the Covid experience and how it had impacted approaches to ESG investment, Ged added:
“There’s no doubt that investors now want to see a more central role for ESG and evidence in a GP that there is a clear story and progression in how ESG is integrated into fund launches.”
Ben Robins, International Funds Practice Group Head at Mourant, elaborated on this, suggesting that the experience of the past year was prompting a greater emphasis on the ‘G’ (governance) element of ESG:
“We’re definitely seeing a greater level of focus with GPs looking increasingly, for example, at management diversity and inclusion as a key area. There’s also far more scrutiny at all levels of the private equity supply chain – on the environmental side of ESG, with a desire to avoid any potential for accusations of greenwashing. It’s prompting a drive for greater specific expertise.”
Looking ahead to 2021, panellists suggested that distribution would remain high on the agenda as an issue for GPs, particularly in light of Brexit, but that Jersey’s role as a specialist private equity centre in Europe, with strong ties to the UK but outside of the EU, was positioning it strongly.
“We expect pretty much business as usual for Jersey post Brexit,” said Ben. “As a jurisdiction, we have considerable experience of supporting non-EU managers in accessing EU investor capital through private placement – it’s a route that clearly works and, if the EU follows the conclusions of its KPMG commissioned survey and wants continued access for its pension fund investors to leading global GPs, that won’t change.”
Regulatory change would also continue to dominate domiciliation, structuring and distribution decisions, according to the panellists:
“In other jurisdictions there has been a huge amount of change in a relatively short space of time as they have sought to come up to speed with global best practice and standards,” reflected Peter. “That has had something of an unsettling effect on investors. However, that’s not been the case in Jersey, which has been on the right path for some time. It’s first mover and open approach to compliance has meant that has been shown to be ready and able to evolve, but at a pace that LPs and GPs can feel comfortable with.”
Substance was a particular area of regulation panellists suggested would remain sharply in focus in the months ahead.
“It will be interesting to see how substance will play out in a world where travel is restricted and people are used to remote working,” said Michelle. “But Jersey has substance codified in law and is well placed to support an environment that values good governance.”
Overall, panellists agreed that, whilst digital tools would play a growing role in supporting an increasingly global investor base, people, pedigree and specialist expertise would remain key to maintaining strong relationships.
“The importance of long-term relationships has really shone through in the pandemic,” explained Ged. “It’s enabled us to keep investors happy and comfortable and close funds.”
“Jersey has earned its reputation because of its global expertise and outlook,” concluded Michelle. “Around 40% of private equity and venture capital work in Jersey is non-Jersey domiciled structures. Being able to demonstrate that sort of specialist expertise to properly service those global demands will really come to the fore in the year ahead for domiciles.”
Elliot re-joined Jersey Finance in November 2018 from Crestbridge where he managed their Management Company Services Group.
Elliot is focussed on defining strategy and execution of marketing Jersey as both a domicile and destination for Hedge and Private Equity Management Companies and Funds.
Elliot moved to Jersey in 2006 to establish a Macro strategy Hedge Fund under the Ermitage umbrella for whom he also seeded other Macro / CTA strategy Hedge Funds.
Elliot founded the Jersey Hedge Fund Managers Group aimed at linking the growing community of local Managers and is a committee member of the Jersey Funds Association and the BVCA Channel Islands working group.
Michael Johnson Group Head of Institutional Services, Crestbridge
Michael is Group Head of Institutional Services and is responsible for continuing to grow and evolve Crestbridge’s overall global proposition in relation to Private Equity, Real Estate, Corporate and Management Company Services. With more than 17 years’ experience in international financial services, Michael was previously Head of Fund Services in the Channel Islands for a large global administrator and was instrumental in developing the firm’s funds strategy. He has also worked in London and New York for a large asset manager. Michael is a qualified person for the purposes of acting as a director of regulated entities and has experience in this role on boards across the alternative asset classes but primarily Debt, VC, Growth, Buy-Out, Real Estate, Fund-of-Funds and Life Sciences. He is the Vice-Chair of the Jersey Funds Association and a Chartered Accountant.
Ben Robins Partner, Mourant Ozannes
I am now pleased to introduce Ben Robins who is a partner at the law firm Mourant Ozannes, a former chairman of our industry body the Jersey Funds Association and one of Jersey’s leading Funds lawyers. Ben is also a member of the BVCA's Channel Islands committee. Ben advises on the formation, operation and financing of private equity, venture capital and debt funds and investment structures, as well as real estate funds. Ben regularly advises fund promotors, managers, investors, directors and services providers across a wide variety of asset classes.
Michelle McNaney Co-Head of Private Equity, Aztec Group
Michelle is Co-Head of the Aztec Group’s Private Equity team. Joining the Group in 2007, She has been instrumental in the development of the company’s award-winning private equity offering, overseeing the growth of the office of the Jersey and wider private equity team, and onboarding a number of significant clients across the mid-market, institutional and secondaries private equity and venture capital markets. She leads a number of client relationship teams and operational initiatives and, as a member of the senior leadership team, plays a critical role in shaping and delivering the Group’s strategy.
An outstanding international reputation in offshore investment funds.
Our market-leading international team spans time-zones, and is known for the quality and quantity of complex work it handles globally across a wide range of alternative fund asset classes – traditionally real estate, private equity, credit and hedge funds.
We’re increasingly called upon to help launch offshore funds for cryptocurrencies, fintech, renewable energy, medical tech and bio-venture companies.
Our ‘one firm’ approach means that working together with clients we deliver seamless, objective and commercially grounded advice. Our lawyers also maintain close contact with the financial regulatory authorities and regularly participate in the development of new laws, regulations and regulatory policy.
For more information visit mourant.com
Bedell Cristin’s Jersey funds and investment practice provides expert offshore legal advice, as part of a global team spanning BVI, Cayman Islands, Guernsey, London and Singapore.
Our expertise covers all types of investment vehicles and asset classes. Our dynamic and respected practitioners have a wealth of experience in helping to structure cross-border investments, notably in real estate, private equity and Sharia-compliant structures.
We advise on the most complex multi-billion fund vehicles, as well as more closely held investment syndicates, ‘club’ and joint venture arrangements and proprietary single-asset holding structures.
Covering the entire investment lifecycle, we assist with the structuring, regulation and operation of vehicles, and acquisitions, reorganisations and exits.
Carey Olsen is a leading offshore law firm. We advise on Bermuda, British Virgin Islands, Cayman Islands, Guernsey and Jersey law across a global network of nine international offices.
We are a full service law firm working across banking and finance, corporate and M&A, investment funds and private equity, trusts and private wealth, dispute resolution, insolvency and property law.
Carey Olsen has one of the largest trusts and private wealth teams in the offshore world. Our global reach, scale and experience mean that we are perfectly positioned to assist and advise on the most demanding and complex cases concerning wealth planning and asset protection as well as the more straightforward day-to-day instructions.
At Hawksford, we work with you to become your strategic partner; adding value by anticipating your needs and delivering when it matters most. Working collaboratively as an extension of your team, we provide flexible and bespoke fund and fund accounting services from Jersey. We work with a variety of clients, from first time managers to some of the largest and most experienced; dealing with a variety of asset classes and structures. No matter the size of your fund, you will have direct access to a fund management team and staff with broad industry experience, years of technical expertise and a hands-on approach to support the setup, launch and day to day running of your fund.
Funds Europe is the leading publication for the European cross-border fund management industry. Our readers are senior institutional investors, fund managers, asset servicers and fund distributors.
Published ten times per year and circulated in over 40 European countries, each issue offers news & analysis, features and interviews providing a complete view of the European funds business. Funds Europe also publish Funds Global Asia.