For several decades Jersey has been building links with markets across the GCC, thanks to the forward thinking, efforts of Jersey’s regulator, government and finance industry, all of whom have visited the region for a number of years.
Against a backdrop of shifting markets and a changing global political landscape, investors in the GCC continue to find genuine appeal in the expertise, substance and stability Jersey can offer as an international finance centre (IFC), as well as its range of tried-and-tested wealth products.
The indications are that investors in the GCC are increasingly likely to need this sort of specialist cross-border support in the future too. According to the Boston Consulting Group, private wealth in the GCC is set to reach $12 trillion by 2021, growing at a rate of 8.1% – compared to the global average of 6% (‘Global Wealth 2017: Transforming the Client Experience’).
Jersey is ready to support this trend, offering GCC investors a safe, neutral and certain platform and enabling them to create a certain future by carrying out their increasingly sophisticated wealth planning and investment strategies.
The need for this specialist support was evidenced in a white paper, published by Jersey Finance in conjunction with Hubbis in 2017, which identified challenges HNW individuals in the GCC will face in the coming decades.
In particular, it found that 55% of professionals working with family businesses in the GCC saw succession planning as the most critical issue for GCC families today.
However, whilst HNWIs in the GCC clearly acknowledge the importance of succession planning there is still a reluctance to engage with third-party support and a tendency to default to deferring succession decisions – something that could prove costly in the long run.
According to the research, there are real misconceptions around the issues and solutions available when it comes to wealth structuring. 56% of GCC-based advisors said that loss of control is the biggest misconception that GCC families have when it comes to wealth structuring, whilst 23% are concerned by the lack of transparency of structures.
This highlights how important it is for professionals with first-class experience in forward-thinking IFCs like Jersey, who are used to managing complex cross-border financial flows, to work with families and investors to bring clarity, build understanding and instil confidence.
Consequently, firms in Jersey are seeing an uptick in the number of private wealth vehicles being re-domiciled to Jersey from less advanced jurisdictions, as investors seek a high-quality trusted solution.
Whilst Jersey has earned a reputation for specialist private wealth work in markets across the GCC, it is also highly regarded for outbound commercial real estate investment, an increasingly attractive asset class for GCC investors, thanks to its stability and flexible structures for pooling capital and acquiring and selling such assets, focusing on the UK as well as Europe and the US.
Additionally, GCC institutional investors, led by sovereign wealth funds (SWF), are looking more and more at opportunities in markets such as the UK, US and Europe and as a result, Jersey fund practitioners are seeing rising levels of capital from institutional investors. The world’s largest private equity fund structured through Jersey, has a GCC SWF as a primary investor.
Jersey’s forward-thinking proposition and expertise in alternative fund servicing, together with its ongoing seamless access to European markets and strong ties to the UK, lends itself well to this trend, with direct investment, co-investment, private equity and club investment deals all amongst the favoured investment strategies for GCC investors.
For further information on Jersey’s world-leading IFC, contact either Cormac Sheedy or Richard Nunn, Jersey Finance Business Development Directors for the GCC.