In order to understand how the industry might develop in the future, it is useful to reflect on the course it has taken so far. This report traces the origins of the international fund jurisdictions back to the 1960s and charts their progress through to the present day.
It explores the growth of alternative funds, the impact of reforms in recent decades, as well as the importance of substance. In summing up, the paper turns to the future, considering the influence of sustainable finance, including ESG investment, and of the developing crypto fund industry.
It closes by contemplating the road ahead for international fund jurisdictions, which have become integral elements of global funds business.
Among the report’s key areas of focus are:
- Key dates, from the establishment of the first expatriate banking operation in Jersey in the 1960s to EU alternative fund regulation in 2018
- The origins of the international funds industry in the 1980s, including the first investment funds offered to expats and the largely Anglo-Saxon asset management industry of the 1990s
- The dawn of alternatives, including the introduction of regulatory measures, the shift towards institutional investors, the heightened focus on governance and substance in the wake of the global financial crisis, and the impact of Brexit
- The future, including the growth of sustainable finance and crypto funds and the importance of first mover advantage when it comes to new investment categories
Commenting on the findings, Elliot Refson, Head of Funds at Jersey Finance, said:
“Given the trends over the last decade or more, highlighted in this paper, there’s no doubt that the fund jurisdictions that will be most successful in the future will be those that are stable, with strong expertise and infrastructure, and robust but flexible regulatory frameworks. This has really been Jersey’s mantra for the past twenty years, and we’ve seen the fruits of that in the growth of Jersey in recent years as a trusted funds domicile.
“There will undoubtedly be more changes over the coming decades and our focus will remain on staying true to our values and on retaining our position as an integral part of the global fund landscape.”
Simon Osborn, CEO of IFI Global and author of the report, added:
“Fund domiciliation patterns have always been subject to change and there is no reason to believe this will not continue to be the case in future. To understand how the asset management business might develop in the future, it is a good idea to know something about how the international fund jurisdictions, on which this industry depends, are evolving.
“This White Paper touches upon how a few unlikely locations, dotted around the world, got into this business, focuses on what is happening in international fund domiciliation today and explores what may well happen to international fund jurisdictions over the next few years.”
Download the report below.