With less than five months remaining of 2020, no one would dispute that this has been a truly exceptional year for many countries and industries.
The impact of COVID-19 is not yet subsiding and we have seen substantial changes in how people interact with others, how they work and even how they manage money. Investors are certainly more vulnerable than ever and their focus on having a balanced and growing investment portfolio, which is built on stable and solid foundations, is very strong.
One market trend we’ve seen is the continued rising interest that investors are showing in the alternative investments market, such as private funds and placements.
According to “The Future of International Fund Domiciliation” published by IFI Global Research in April 2020, supported by Jersey Finance, it is expected that alternative investing will grow strongly in the next few years.
This has been echoed by the growth of private placement business in Jersey in the recent months. Last year, we saw a healthy uptake in the number of alternative fund managers choosing to market their funds into the European Union through Jersey using national private placement regimes (NPPR).
In 2019, the net asset value of funds administered in Jersey reached £345.7bn, an 8% year-on-year rise and the highest level ever recorded, with strong performances in private equity (£136bn) and hedge (£51bn). In addition, the Jersey Private Fund continued to establish itself as the go-to vehicle for sophisticated investors, including family offices, with more than 300 established as at December 2019.
The NPPR avenue is probably not known to many Asian investors, as their primary focus is still predominantly in the home markets. However, it is getting attention from fund managers who are actively seeking alternative ways to manage their funds in a dynamic global market landscape, or preparing for investments in the European Union in the post COVID-19 and post-Brexit world.
I recently joined a virtual Funds Europe jurisdictional webinar on “Seeking Certainty in the Alternatives Landscape’ and discussed the evolution of this area. As pointed out by colleague Elliot Refson, Director of Funds at Jersey Finance, in the panel discussion, the cost effective and tax transparent approach provided by Jersey structures has made its private placement regime attractive to managers.
The current market environment has undoubtedly provided a unique opportunity for independent and international jurisdictions, which have strong track records and professional teams, to support alternative funds and their managers to capture growth opportunities. For Jersey, it is time to ensure we put a strong focus on continuing to grow our expertise and skills to capture the growth opportunities ahead.
This article was originally published on LinkedIn.