Future-proof solutions for US promoters and investors
‘Old Jersey’ is a leading, future-focussed international finance centre (IFC), located between the UK and France. The Island’s unique constitutional position as a British Crown Dependency means that it has domestic autonomy, which has been preserved for the last 800 years. Being outside the European Union (EU) means that Jersey is able to offer more flexible funds regimes. Jersey’s special relationship with the UK means that it will continue to have access to UK investors, despite Brexit.
New international governance requirements for hedge funds make Jersey a clear choice. Jersey can offer a centre of ‘substance’ to cater for the requirements of the Organisation for Economic Co-operation and Development’s (OECD’s) Base Erosion and Profit Shifting (BEPS) project. The Island has been home to hundreds of hedge funds and more than 30 hedge fund managers are currently based in Jersey, following a mixture of discretionary, quantitative, and systematic, global macro, managed futures and commodity trading advisor (CTA) strategies. Jersey is also seeing an increasing number of hedge fund managers looking to relocate all or part of their business here, from well-established operations through to start-ups
Jersey offers a full range of flexible fund structures and regulation. Access to professional investors throughout Europe continues to be available through local national private placement regimes (NPPRs).
And, because Jersey is not part of the EU, for those Jersey funds and Jersey managers that target ‘Rest of the World’ (ex-EU), the requirements of the EU’s Alternative Investment Fund Managers Directive (AIFMD) will be out of scope.
Jersey fits the bill for US managers looking for a base outside the EU, but within the European time zone, and beyond the main requirements of AIFMD, but with continued access to UK and EU investor base. A significant number of US asset managers are already promoting various types of funds domiciled here. Of the total assets under administration in Jersey, US-promoted funds represent billions of dollars, and the US is Jersey’s second-largest fund promoter market behind the UK (Monterey Insight Jersey Funds Report 2017).
Hedge fund investments made or held from Jersey have matured over the last 30 years. The net asset value of regulated hedge funds in Jersey stands at US$69 billion, 17% of the total net asset value of funds under administration (Jersey Financial Services Commission, JFSC, December 2017).
Hedge fund manager figures now place Jersey in the top 10 globally, with large players such as Systematica, Brevan Howard and BlackRock relocating here.
From our experience to date, Jersey is a great jurisdiction for the investment management industry. A fast, efficient and commercially-minded financial environment, with a strong regulator, that is going from strength to strength.
Ben Dixon General Counsel and Director, Systematica
Billion net asset value of all alternative funds being administered in Jersey.
Jersey Financial Services Commission, 31 December 2017
- Private equity
- Venture capital
- Real estate
Jersey for Institutional Investors
With pension funds increasingly looking to hedge funds, against a backdrop of changing demographics, Jersey has much to offer.
We already provide financial services to a large number of institutional investors investing in Jersey-domiciled and administered funds and corporate structures. In 2017, Europe Economics estimated this to include around US$69 billion of funds under administration in Jersey, of which around US$51 billion was from pension funds. A further US$156 billion was estimated to be held by pension funds through Jersey corporate structures.
Jersey’s offers tax-exempt institutional investors:
- Ease of doing business, leading to cost savings and lower risk management costs
- Tax neutrality, facilitating cross-border investment
- Portfolio diversification, for reliable returns on long-term investments
‘Jersey for institutional investing: A clear choice’ Europe Economics, November 2017