Jersey could see a boost in investment funds business over the Brexit negotiation period because of the certainty and stability of its third-country position compared to the uncertainty over that of the UK, says Ogier funds partner Emily Haithwaite.
The outcome of the negotiations of the UK's separation from the EU – which have formally begun now that Article 50 of the Lisbon Treaty has been triggered – is unclear, and many UK-based fund managers are left unsure whether their fund structures will continue to allow access to EU investors.
But Emily says that Jersey's ability to offer access to EU investors via existing National Private Placement Regimes and its endorsement by ESMA for an AIFMD passport, gives fund managers a higher degree of certainty.She said: "Many UK-based managers are hoping that structural solutions to EU distribution will still be available post-Brexit, but nobody knows what those negotiations will produce and what the timing of those will be, so in the interim, Jersey is well placed to service UK-based fund managers who are thinking about raising funds within this two or three-year transitional period.
"We are more developed in terms of our third-country thinking than the UK."The National Private Placement Regimes are working – fund managers are able to market their funds within the regimes that are in place, and this route has been a solution for those managers who, for whatever reason, don't need the full passport or for whom the cost is prohibitive but also in terms of reducing the burden of operational set-up and ongoing reporting. "Many of our clients who have tried the passporting route have come back to private placement having realised that they can market to their target EU investors within the national private placement regimes."