Pension fund investment through Jersey is supporting the futures of almost 60 million people around the world, according to new research published by Jersey Finance today. Undertaken by independent economic consultancy firm Europe Economics, the research entitled ‘Jersey for Institutional Investing: A Clear Choice’ looks at how Jersey supports and facilitates the effective management of pension funds and other institutional assets such as endowment funds and sovereign wealth funds. In terms of financial value for pension funds in particular, the report shows that pension fund assets worth £160 billion are invested through Jersey, including £39 billion in fund structures and £120 billion in corporate vehicles. In fact, the research makes clear just how vital the Jersey finance industry is in supporting the pensions of people around the world – securing benefits for them now and in the future.
The report also found that:
- A total of £52bn of funds under administration in Jersey is attributable to taxexempt institutional investors, and the focus of that institutional fund business is overwhelmingly on pension funds, accounting for almost four-fifths (79%) of the total
- 46% (£18 billion) of pension fund assets in Jersey originate from the EU (excluding the UK), including the Netherlands, France, Denmark and Germany. Another 13% (£5 billion) comes from the UK, less than 10% (£4 billion) is from North America, and 32% (£12 billion) originates from the rest of the world
- Most of the institutional investment administered in Jersey (60%) is invested in private equity and venture capital, with around 19% invested in real estate. Bonds, equities, mixed and money market instruments account for 7%
The research also consulted Jersey-based lawyers and administrators who service funds and corporate structures, to get clarity on their views. The focus was to determine how Jersey is considered to differ from onshore jurisdictions in relation to attracting institutional investment. In fact, the research found that having a proportionate regulatory regime such as Jersey’s (which helps to create a more competitive market) was deemed by respondents to deliver a ‘high level of benefit’ (62% of respondents). Jersey’s access to a skilled labour force, meanwhile, was also considered highly beneficial (40%). Geoff Cook, CEO of Jersey Finance, commented on the findings: “It is wonderful to see
research like this, which really quantifies the clear, positive impact Jersey can have on the futures of people all over the world, supporting them in their retirement. It shows the scale of what is possible from working with institutional investors, and makes clear how vital the work done here on the Island is.
“It also highlights that this work is truly global. The pension funds housed through Jersey, for instance, represent around 60 million people around the world – possibly many more. It reflects the beneficial contribution Jersey makes to economies and societies worldwide.”
Ross Dawkins, Principal at Europe Economics, the economic consultancy, said: “This research helps explain how tax neutrality plays a vital role in supporting institutional investment. For institutional investors who make cross-border investments into non-tax neutral countries, creating tax transparent vehicles can be complex and costly. Investing through a tax neutral International Finance Centre like Jersey avoids these complications. It makes it easier to make cross-border investments, creates more diversified portfolios, and delivers better returns. Ultimately, this benefits everyone – especially the people on the street who rely on their pension.”
Geoff Cook added: “Delivering a transparent, simple and cost-effective platform for institutional investors is essential for pensions. Clearly, tax neutrality is fundamental to this. What this research also makes clear is that non-tax factors, like Jersey’s concentration of expertise and its strong regulatory environment, are just as vital for institutional investors.”
The full report, including key findings and full methodology, is available here.
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