"Brave approach" needed for Jersey funds success

Friday 31 May 2019

A "brave approach" is needed to ensure the island can continue to build on its growing status as a centre for funds management, which last year saw the total net asset value of funds under administration reach a record high of over £320billion, the Chairman of the Jersey Funds Association (JFA) has said.

The words from Mike Byrne (pictured) came earlier this month at the annual JFA dinner in which he told an audience of over 450 professionals, politicians and regulatory representatives of the "health" of the industry.

He said: "It's been a very successful year for our funds industry, both in the funds and the fund manager space, with our focus on alternative funds creating a very stable platform of long-term capital that is largely insulated from short term market sentiment.

"That focus is very well placed, with pensions, sovereign wealth funds and institutional investors all continuing to allocate to private equity, private debt, real estate and infrastructure funds. With a record £320billion of fund assets now being serviced across our regulated funds space and a further £20billion now held in Jersey Private Funds, there is a clear picture of an extremely healthy jurisdiction."

Pictured: Jersey's fund assets stood at a record high of £320billion last year.

He added that the industry had faced challenges over the past year, but had managed to overcome these.

In particular, the past year has seen an almost unprecedented level of cross-industry work to ensure that we responded to economic substance requirements by developing a law that demonstrates our commitment to meeting global standards and reflects the true substance which we know exists in our industry.

"In fact, we are seeing an ever-increasing community of fund managers fully resident in the island, across private equity, hedge, debt, real estate and crypto funds. These managers are bringing a real depth and diversity to our industry at a time when the issue of substance is so high on the agenda."

Pictured: Mr Byrne said there had been cross-industry work on responding to the new Economic Substance legislation introduced following instructions from the EU Code Group.

Looking to the future, he advised: "We must continue to adopt a brave approach in how we operate, in the markets we serve and in the products we offer. We need to think creatively, for instance, about how we bring to life the Jersey proposition and the positive solutions we can provide for both EU and non-EU investors. And, whilst discussions around the AIFMD and passports now seem long in the past, the fallout from Brexit continues to have unintended consequences on many fund jurisdictions, including Jersey, and we must be prepared for that."