Why South Africa Fund Managers Choose Jersey

In section one, Rufaro highlights the strong historical and financial connection between Jersey and South Africa. South African banks and wealth managers have maintained an offshore presence in Jersey for many years, noting that South Africans make up 4% of Jersey’s population. Additionally, there are 78 South African funds in Jersey, which represent about 5% of the total number of funds held there. Several prominent South African fund managers are also present in Jersey, including well-known names such as Melville Douglas, Ashburton, and Knife Capital.

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In section 2, Rufaro and Emily explore the relationship between Jersey and South African fund managers. Emily explains that many use parallel structures, with a Jersey structure for international investors and a South Africa structure for South African investors. Recent years have seen a growth in funds investing in private equity and venture capital across sub-Saharan Africa, particularly in technology sectors. Jersey’s Limited Partnership is a popular structure, and the Island also attracts family offices of high-net worth South Africans seeking private fund structures for their investments.

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In section 3, Emily addresses the common challenges South African fund managers face when accessing global markets, particularly the difficulty of securing international capital through local structures. Jersey helps overcome these barriers by offering strong regulatory frameworks, political stability, and access to service providers. Jersey’s Alternative Investment Fund Managers Regime allows marketing to UK and EU investors without being subject to the full regulatory perimeter when targeting regions like the US or MENA. Jersey also offers a tax-neutral environment and a wide pool of specialists to support fund managers in launching and operating their funds effectively.

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In section 4, Emily outlines several key advantages of Jersey’s fund offerings that appeal to South African fund managers:

1. Regulatory reputation: Jersey is one of the best-regulated international finance centres, highly rated by the World Bank, IMF, and OECD. It’s on the EU Code of Conduct’s white-list for tax good governance and meets global standards for transparency, AML, and combating financial crime.
2. Speed to market: Jersey’s fund products, particularly the Jersey Expert Funds and Jersey Private Funds (JPFs), offer quick entry to market while maintaining strong regulatory supervision and AML compliance.
3. Cost efficiency: JPFs, designed for fewer than 50 eligible investors, are not required to issue formal offer documents or be audited, resulting in lower operational costs compared to fully regulated funds.
4. Access to capital: Jersey provides a significant marketing advantage, allowing South African fund managers to access EU and UK investors through National Private Placement Regimes.

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In section 5, Emily shares insights into how South African fund managers perceive Jersey as an offshore jurisdiction. Many new fund managers are often surprised by the size and sophistication of Jersey’s funds industry, as well as the calibre of its fund managers and financial professionals. Jersey’s strong regulatory framework is a key factor in attracting fund managers, making it easier for them to raise capital due to the trust investors place in well-regulated jurisdictions.

From a business perspective, Jersey is seen as extremely user-friendly. The licensing process is streamlined, thanks to effective cooperation between regulators and government departments, ensuring a smooth experience for fund managers setting up or relocating operations. Additionally, the quality of office space, housing, and lifestyle makes Jersey an appealing destination for fund managers. The growing community of fund managers on the Island, including many South Africans, further enhances its attractiveness.

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In the final section, Emily shares examples of Jersey’s involvement in philanthropic efforts in Africa. One exciting project involves the establishment of a registered charity in Madagascar, which will train underprivileged youth as software developers. This initiative provides education, mentorship, and coding training, helping young Madagascans find employment. Businesses that hire them will contribute financially to keep the charity sustainable.

The second project, EduInnovate, is focussed on educational impact, investing in technology and services to address the education funding gap in Africa, where literacy levels remain low. Both projects chose Jersey as their domicile due to its strong reputation and focus on Africa, championed by Jersey Finance.

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