Jersey Fund Structures

Jersey offers a full spectrum of fund types and structures including Jersey Private Funds, Notification Only Funds (also known as Eligible Investor Funds) and Collective Investment Funds (CIFs), such as Jersey Expert Funds and Jersey Listed Funds.

These structures are outlined below, with links to our factsheets offering more detailed technical information.

With substantial experience of the full spectrum of fund strategies and asset classes – including private equity, real estate, infrastructure, sustainable investment, hedge fund and secondaries funds – and growing expertise in digital assets – Jersey has developed a well-respected and forward-thinking sector. It offers solutions for fund managers with regimes from retail options through to the more sophisticated and institutional end of the market.

Jersey is a specialist centre for the alternative asset classes, which represent 89% of total funds business in Jersey, with private equity and venture capital up 46% from December 2021 to £206.9bn (Source: JFSC, March 2022).

The Jersey Private Fund (JPF) was introduced in April 2017 and has become highly popular with the total number of registered Jersey Private Funds (JPFs) surpassing the 500 mark by January 2022.

By being cost-effective, flexible and swift to market, the structure has genuinely become a go-to vehicle particularly when it comes to private capital co-investment and cross-border institutional alternative fund structuring.

Unregulated Eligible Investor Funds (UEIF) fall outside the regulatory regime under the CIF Law, and the requirements of the Certified Funds Code do not apply. These funds must meet the criteria set out in the Collective Investment Funds (Unregulated Funds) (Jersey) Order 2008 (the Order).

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Expert Funds are attractive for non-retail schemes, whether joint ventures, hedge funds, private equity vehicles or other schemes aimed at ‘“Expert Investors”.

Regulated Eligible Investor Funds are similar to Expert Funds in structure, authorisation requirements and ongoing regulation, except for the following key differences:

• Must be an AIF, for the purposes of AIFMD
• The offering document is not required to comply with the usual disclosure requirements
• All investors must be “Eligible Investors” (see below)

Like Expert Funds, these Funds are attractive for non-retail schemes (including joint ventures, hedge funds, private equity vehicles and other schemes aimed at “Eligible Investors”) and can be established quickly and cost-effectively.

Listed Funds are established on certification by the fund administrator that the fund complies with the criteria set out in the LF Guide. The JFSC issues the relevant certificate on receipt of the certification and the fund’s offer document. As a result, a Listed Fund can be established in Jersey within 3 days.

This category encompasses open-ended funds which are to be offered to retail investors and other CIFs which do not qualify as an Expert Fund, Listed Fund or Regulated Eligible Investor Fund.

A hedge fund is a form of investment that builds a portfolio that includes a variety of alternative investments such as stocks, bonds, currencies etc.

Unlike traditional investment vehicles, such as mutual funds, hedge funds have greater flexibility in their investment strategies allowing a hedge fund manager to buy, sell or hold these funds as part of their investment strategy to minimise risk and maximise return.

In the investment sector, companies may utilise hedge financing to leverage particular investment positions with a view to enhancing their investment position. This approach requires a sophisticated hedge fund manager who can deliver precise risk assessment and can adapt quickly as market positions shift to maximise returns within the overall portfolio.

Compare each of these fund types in our comparison factsheet including:

• Fees
• Timescales
• Legal Structure/ Restrictions
• Investors
• Service Providers
• Promotion
• Advantages
• Disadvantages

This white paper, produced by IFI Global, explores the origins of the key international fund jurisdictions around the world, including Jersey, how they became established bases for the asset management industry and how they are evolving.

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 and the expansion of hedge, private equity and real estate funds, and other alternative investment products 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

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There are a number of changes relating to the NPPR regime brought about by AIFMD II. They include new requirements for non-EU Alternative Investment Fund Managers (AIFMs) to market EU or non-EU Alternative Investment Funds (AIFs) through NPPR, and they will be added under Article 42 AIFMD

For those less familiar with the industry, we’ve produced our ‘Put Simply’ guide, making it simple to understand what a fund is, how they work, and why investors would choose to use a fund or portfolio as part of their investment strategies to invest their money.

The guide also explains how Jersey specialises in ‘alternative investments’. These are known as ‘alternative’ compared to the more conventional funds that those investing choose to have in their portfolio such as bonds, equities and cash. The guide takes a look at the types of assets alternative investment funds may invest in using a Jersey structure, including Real Estate, Private Equity, Venture, Infrastructure, Debt and Hedge.