Discussing trends within the alternative fund space, panellists at this year’s Jersey Finance London Funds Conference agreed that a growing focus on governance, substance and reputation was presenting opportunities for Jersey to affirm itself as a major centre for fund management as well as fund servicing.
The net asset value of funds under administration in Jersey grew over the final quarter of last year to stand at $334bn, with alternatives business representing 73% of that total. With 126 fund promoters now operating in Jersey, a 113% increase since 2011, panellist Ben Robins, Chairman of the Jersey Funds Association, said that the inward migration of fund managers to Jersey was ‘an exciting trend’ and suggested that AIFMD and the OECD’s Base Erosion and Profit Shifting (BEPS) project in particular were encouraging managers to reconsider their business models, providing Jersey with real opportunities as a ‘substance’ jurisdiction, offering genuine asset management expertise.
The significance of BEPS was reinforced in a keynote speech by Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration, during which he underlined the importance of its implementation and how it now gives more than 100 countries an opportunity to act on an equal footing to promote global growth.
The conference, entitled Clear Direction, took place on 3 March at 8 Northumberland Avenue and was attended by more than 300 London, UK and European funds professionals.
Delegates also heard that AIFMD is still considered the biggest regulatory issue for funds professionals and panellists agreed that, whilst the trend is towards a more exacting regulatory environment, flexibility remains key for alternative managers and Jersey was ideally positioned as a result of its existing private placement access and ESMA-verified passporting potential as a third country under AIFMD.
Geoff Cook, CEO of Jersey Finance, said: “What was encouraging from this year’s event was to hear panellists confirming that the opportunities we identified for Jersey’s funds industry some time ago are now coming to fruition, not least that the jurisdiction is seeing tangible growth in alternative fund management business. Figures now place Jersey in the top ten centres worldwide for hedge fund management business, and we are also seeing a strong emergence of infrastructure and debt fund business to complement our existing strength in the private equity and real estate asset classes.
“Whilst some centres are struggling to come to terms with this new world of regulation, led by AIFMD and now BEPS, Jersey’s proactive approach to transparency and substance is positioning it strongly as a sustainable finance centre, whilst our desire to embrace technology and fintech is proving attractive to managers who are faced with increasingly complex due diligence, reporting and efficiency challenges. There is real confidence in Jersey’s platform and in its ability to absorb the increasingly high global standards and, as a result, we fully expect this pattern of growth and the inward migratory trend to continue.”
Keynote speeches were also given by broadcaster Nick Robinson; Bill Hughes, Head of Real Assets at Legal and General Investment Management; and Financial Times columnist Tim Harford. Panellists included Simon Witney, Chairman of the BVCA Legal and Technical Committee; Justin Woodhouse, Tax Partner at PwC; Christopher Hilditch, Partner at Schulte Roth and Zabel; Paul Rouse, Chief Financial Officer at Systematica Investments; Ben Robins, Chairman of the Jersey Funds Association; Mike Jones, Director of Policy at the Jersey Financial Services Commission; and Michael Gray, NED at Triton.
Photo: (left to right) Christopher Hilditch, Partner, Schulte Roth & Zabel LLP; Justin Woodhouse, Tax Partner, PwC; Simon Witney, Chair of the BVCA Legal and Technical Committee; Pascal Saint-Amans, Director, OECD Centre for Tax Policy and Administration; and Nick Robinson, broadcaster and moderator.