JERSEY needs to focus on what managers really care about when it comes to choosing a fund domicile and assert its core strengths to retain its competitive position.
This was one of the key messages from Jersey Funds Association chair Michael Johnson, who addressed an audience of more than 400 at the organisation’s recent annual dinner.
He said that in a challenging year globally for the sector, Jersey had held its position well. In particular, he pointed to the ongoing success of the Jersey Private Fund regime, with the total number of JPFs now standing at just over 700 – an increase of 100 since last year – while the total assets under administration in Jersey now sits at £520bn.
Nevertheless, he stressed that “momentum had to be maintained” if Jersey was to retain its leading position as a European funds domicile with global ambitions.
He said: “After five continuous years of growth, the performance over the past year was largely flat, which is a first for Jersey, but not unexpected given the incredibly difficult fundraising environment we have seen over the past year at a global level. The outlook remains calm but not stable, and we need to be alive to the macro conditions shaping our industry.”
He highlighted that alternatives – including private equity, real estate and venture capital – continued to represent 90% of the Island’s total funds business, a model that he said had created a stable platform of long-term capital. However, he said there was a risk of that model being “buffeted by global trade-winds” and urged caution in the face of increased competition as market conditions improve.
“There are brighter times on the horizon but we cannot be complacent,” he stressed. “Investors are continuing to apply pressure and are focusing new commitments on a narrow swathe of funds. Equally the activity related to the mountain of dry powder available remains stunted by historical standards. It’s vital that Jersey recognises that these macro-economic and political circumstances are out of our control and finds ways to ensure it can keep its wheels turning.
“It’s critical that we focus acutely as a jurisdiction on what managers really care about when it comes to choosing a fund domicile and assert our core strengths – our speed and our high-quality service levels in particular. By embracing innovation and being agile, we can also enhance our product and service range, including exploring the introduction of a Jersey ELTIF solution and clarifying our virtual assets proposition, for instance.”
JFA vice-chair JFA Joel Hernandez pointed further to the need for targeted innovation, and the significant volume of technical issues the JFA had addressed over the past year.
In particular, he highlighted updated guidance from the JPF and progress being made in the virtual assets space.
“The recently published updated JPF Guide will help evolve and modernise that product further. This includes widening the categories for eligible investors, mutual recognition for carry schemes that have an element of team co-investment and widening the categories for family and employment connections. A similar approach is also being taken to update the JFSC’s guidance to industry on virtual assets, specifically the tokenisation of real-world assets. This is a clear trend and it’s vital that Jersey maintains its reputation for good practical guidance to secure its future in this space.”
More than 400 people from across the industry, including lawyers, fund administrators, fund managers, compliance experts and accountants as well as politicians and regulatory representatives, attended this year’s dinner.
Gold sponsor for the evening was Mourant and silver sponsors were IQEQ, PwC, Ogier and BNP Paribas while the champagne reception was sponsored by Carey Olsen and the NextGen table was hosted by Gen II and KPMG.
