A bright future for the Jersey funds industry?

Friday 28 April 2017

The Chairman of the Jersey Funds Association has highlighted reasons for future confidence in the industry at an annual dinner.

Global trends to increase allocations to alternative assets should give managers confidence in the future of Jersey’s funds industry, according to Mike Byrne.

Speaking at this year’s annual JFA Dinner Mr Byrne told the audience moves amongst institutional investors were having a positive impact on the performance of Jersey’s funds industry, with figures for the end of 2016 indicating that the total net asset value of funds under administration in Jersey stood at £260bn, up 15% year-on-year.

Pointing to rising levels of business across the well-established hedge, real estate and private equity asset classes, but also significant growth in emerging areas including debt, credit and infrastructure funds, Mr Byrne said: “It’s clear that global allocation to alternatives continues to increase, from pension funds, sovereign wealth funds and institutional investors.

“Figures from Preqin for the first half of 2017, for instance, show that 57% of investors are expected to allocate more to private debt in the coming year, whilst 40% will increase more to private equity, 38% to infrastructure and 24% to real estate funds.”

“All four asset classes form the bedrock of Jersey’s funds industry which, against this backdrop, looks in excellent health with levels now at their highest in five years. Jersey’s focus on alternative investment funds has created a very stable platform of long-term capital that is largely insulated from short term market sentiment.”

Looking at the year ahead, Mr Byrne suggested that market developments and a sustained focus on regulatory enhancements could present Jersey with some opportunities:

“In light of Brexit, third-country AIFMD passporting has become a political rather than a regulatory issue, which is disappointing, but doubling down on our tried and tested National Private Placement Regime (NPPR) as well as Reverse Solicitation has proven an effective distribution strategy for the types of funds we look after in Jersey. In fact, the uptick we have seen in NPPR is evidence of it being a genuinely attractive alternative to full AIFMD compliance.

“Our continued focus on enhancing our funds regime, meanwhile, is vital, and the reaction to the introduction in March this year of the Jersey Private Funds Regime has been extremely positive, with a strong pipeline of applications already received. The challenge going forward is to ensure we retain the optimum balance between compliance on the one hand and being business-friendly on the other. Competition is ever increasing, as is the level of sophistication of financial criminals, and getting this balance right is key to the continued success of Jersey as a high-quality specialist funds centre.”

The JFA Annual Dinner helped raise in excess of £5,000 for the JFA’s nominated charity, Mind Jersey, and featured comedian Henning When.

Lead sponsor for the evening was Mourant Ozannes and Silver sponsors were BNP Paribas Securities Services, Moore, Ogier & PwC, whilst the champagne reception was sponsored by Carey Olsen.