The continued shift in regulatory demands together with a desire for greater diversity in asset management strategies is adding layers of complexity for fund managers.
When combined with the unprecedented flux caused by the pandemic, the question of which domicile to choose has taken on further resonance.
Nowhere is this more apparent than when it comes to first time managers.
Although first time fund managers across the alternatives spectrum, from private equity and venture capital to real estate and infrastructure, may well possess significant amounts of experience and know-how, they are nevertheless presented with a number of specific challenges when it comes to getting their operation and first funds off the ground.
Whereas established managers will already have networks and processes in place, first time managers are essentially starting from scratch. Access to investor capital, finite resources, time and costs are all potential issues.
This makes choosing partners – including a domicile – who understand the first-time manager market absolutely critical. Having a reliable, robust platform on which to build a fund operation can support success for the longer term.
Jersey has a long-track record in supporting the needs of alternative investment managers such as private equity, hedge and crypto and has become a centre of excellence.
Recent figures for the industry back this up – the total value of fund assets serviced in Jersey at the end of 2021 stood at just more than $600bn, a new record high and an increase of around a fifth year on year.
The statistics show particularly strong performances in the private equity asset class, which grew 27% over 2021 and now represents just shy of half of all funds business done in Jersey (46%).
But recent trends have shown that, while Jersey continues to support the strategies of mature, big-ticket managers, a growing number of first-time managers, including those in the Middle East, are looking to Jersey to support them on their journeys too – at both a fund and a fund manager level.
A certain choice
As a well-respected international finance centre, with a reputation predicated on more than 60 years’ experience in financial services, Jersey has captured the attention of a growing number of investors and fund managers from the Gulf region.
As a jurisdiction, Jersey’s default is stability, both political and fiscal. Further, as a domicile it offers a minimal change outlook from a regulatory, legal or economic perspective. This base of stability is underpinned by tax neutrality and supported by world class infrastructure highlighted, for example, by the fastest broadband in the world.
In particular, Jersey’s capabilities and expertise in Islamic finance add significant appeal by providing the necessary framework to support Shariah-compliant structures.
With a growing interest in alternative investment opportunities across the Gulf region, Jersey’s ability to support the regulation of Islamic finance products positions it perfectly. This, alongside Jersey’s global distribution capabilities, put the jurisdiction in a strong position to meet Middle Eastern first-time managers’ strategic global needs.
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