Jersey–based fund managers are located in a ‘third country’ from a European Union (EU) perspective and therefore the full scope of The Alternative Investment Fund Managers Directive (AIFMD) need not apply. This means that they may not be required to comply with certain more onerous elements, such as reporting and disclosure of remuneration. Importantly, the benefits of a Jersey manager can apply wherever the funds themselves are domiciled, be it in Jersey or elsewhere. Put simply, access to Europe through the National Private Placement Regimes (NPPR) using a Jersey manager is a well-established model offering clear advantages. NPPR is a recognised path and a model that has worked, and continues to work extremely well. At the end of June 2020, there were 192 managers in Jersey marketing over 333 funds into the EU alone using the NPPR route (Jersey Financial Services Commission, JFSC). South African managers account for the 8th largest pool of capital globally in respect of Jersey-based fund promoters. This includes firms such as Stanlib, Ashburton, Novare, Ethos, Westbrooke and Fountainhead and we very much look forward to building on these foundations.
Figures from Preqin show that 55% of European investors in alternative real estate and 62% in private equity are based in the UK, Switzerland or the Netherlands. From 2021, only one of these countries is in the EU, therefore the ongoing onerous regulation and expense in order to access only one or two EU Member States will be disproportionate when a simpler alternative is available. The reality is that few managers need blanket access to all EU Member States. In cases where they do, then an onshore option works best, but with European Commission figures suggesting that 97% of managers actually market to three EU markets or less, then private placement offers a very credible, fast, cost-effective and sensible option.
For decades, Jersey has set itself apart as a reputable, centrally located jurisdiction for investors from key global markets. Jersey provides excellent third country access to the EU market through the use of NPPR to non-EU countries.