World in Motion
With ‘les Bleus’ fresh from securing their first World Cup win since 1998 with a win over Croatia, and with a Serbian and a German claiming singles victories at Wimbledon in the past week over Spanish and US opponents, the world of sport has certainly taken on an international flavour in recent weeks.
So too has the world of politics, with US President Trump meeting Russian President Putin recently, hot on the heels of an interesting meeting with UK Prime Minister May, where global trade deals were a key focus.
It struck a chord, because we often talk about Jersey’s role in the global marketplace, and how our industry here is providing value to companies and investors around the world. Take our expertise in alternative funds, for instance, and private equity in particular. Just last month, Jersey Finance was present at private equity events in Africa (the 4th Annual Private Equity in East Africa Conference in Nairobi), Portugal (InvestEurope CFO Forum), and the US (SuperReturn US East).
The UK and EU are still core markets for us, but increasingly Jersey is being recognised as a centre of excellence in alternative fund structuring on the global stage. Indeed, it’s a core part of our forward-thinking strategy to embed relationships with overseas markets.
The most recent figures bear this out – statistics from the JFSC show that over the course of 2017, alternative funds business in Jersey grew 18%, with private equity driving this growth, rising by an impressive 39%. Interestingly, private equity business from emerging markets specifically rose 20%.
And that trend has persisted into 2018, with alternatives business up 2% on the quarter, private equity work increasing marginally, but emerging markets work rising 5% on a quarterly basis. We see these dynamics continuing through 2018 as we continue to push forward to build relationships in key overseas growth markets, developed and emerging.
We are pursuing an ambitious strategy in the US, for example. Earlier this year, we announced that we were planning to open a new Jersey Finance office in New York, and later this year Jersey will introduce new Limited Liability Companies (LLC) legislation, largely to support US alternative fund managers.
LLCs are popular amongst alternative fund managers in the US, and the feeling is that introducing the structure will strengthen Jersey’s position in the market and attract more business from US-based institutions and funds who want to invest capital into Europe.
With regards to Africa, a growing number of fund managers based on the continent are looking to Jersey as an expert hub that can help them raise capital efficiently, safely and securely. The indications are that many managers in Africa have great ideas and deal flow but are struggling to attract investment from large European institutional investors and pension funds.
Jersey has the right funds ecosystem, expertise and ability to provide them with a clear solution, thanks to its credentials on transparency, innovation and quality.
As far as Europe is concerned, Brexit ‘deadline day’ is now less than a year away and, with the UK government’s white paper having set out its position, EU market access now looks like a thorny issue for UK fund managers.
Further, a recent survey by IFI Global of managers in the UK found that, although 70% attached a level of importance to the EU to their business, the overwhelming majority, 74%, had not made any decisions on Brexit yet. This is staggering, given we are just eight months from the UK exiting the EU.
Jersey is ready to play a supportive role to enable non-EU (including UK) managers to continue to market their funds into the EU through its tried-and-tested private placement regime – around 300 funds are currently being marketed through Jersey in this way and we anticipate this figure will rise as we approach Brexit.
A quick look around some of the work being done by Jersey firms illustrates this global role in the alternatives space, including the world’s largest investment fund (the SoftBank Vision Fund), which raised capital from some of the world’s largest sovereign wealth funds and biggest technology companies; ADP I, a Jersey expert fund focussing on private equity fund investments across Africa; and an Australian-based fund promoter of an Asia-Pacific multi-strategy equity fund that has a global investor base and invests across developed Asia.
Taken together, this is all evidence of the good work being done here that is helping to keep investment funds moving around the world. With estimates indicating that alternatives’ share of global assets under management could more than double from current levels to more than $21trn in 2025, it’s a good position to be in.