Building on Island’s positive value for the global economy

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Comment by Joe Moynihan, chief executive of Jersey Finance Ltd

LOOKING back at the last year, the challenges presented by the pandemic have impacted the finance sector globally – accelerating rather than slowing change in the way we transact business.

Despite the ever-changing environment and disruption, Jersey’s international finance centre has proved forward-thinking, innovative and resilient throughout this period.

2021 marks the 60th anniversary of our Island’s modern international financial services industry. To celebrate this milestone, Jersey Finance set an ambitious fundraising goal of £60,000, all of which will go to local charities via the Association of Jersey Charities.

We hosted several initiatives throughout the year to help us achieve this fundraising target, including the ‘Together We Shine Fundraising Week’ in September kindly sponsored by Rathbones which saw 30 finance industry professionals ‘sent over the edge’ in a sponsored abseil of Mont Orgueil.

I’m very proud of the fact that the finance industry has managed to raise £23,890 to date. Plans were disrupted in the early part of the year, but our fundraising efforts will continue into 2022, as we still aim to raise £60,000 for the AJC.

In looking at 2021 industry performance there are some key milestones worth noting.

Today, Jersey is home to the greatest number of FTSE 100 and AIM-listed companies registered outside the UK; and more than 20 reputable international banks are based here. And in the funds space, we reached new record levels this year.

Sustained buoyant private equity activity continued to drive growth in Jersey’s investment funds sector in 2021 as the total value of fund assets administered in the jurisdiction grew by £26.3 billion to stand at a new record level of £436.3 billion at the mid-year point.

The popular Jersey Private Funds structure, designed for small groups of sophisticated and professional investors, also continued to grow (up 13% at the half-year point).

In addition, the number of fund managers choosing to market their funds into the EU through Jersey using national private placement regimes (NPPR) is continuing to rise.

This is positive news in the post-Brexit environment. It indicates that non-EU managers are still finding appeal in the private placement option Jersey provides, enabling them to access vital EU capital.

Jersey Finance has a strong tradition of producing evidence-based research – we see research as a core part of our work. It is through research that we can bring new insights to the market, help drive positive change based on facts and inform our own activities.

Last month, we launched an important new research paper entitled ‘Jersey’s Contribution to Global Value Chains’. We commissioned the Centre of Economics and Business Research to help us understand Jersey’s global economic footprint, in other words, how much our financial services industry supports economic activity around the world.

Indeed, Jersey is a key location for pooling capital and for facilitating international trade and economic activity. Value chains are the full range of activities that firms and workers undertake to bring products or services from conception to end use and beyond, within the same firm or divided among different firms and countries. Jersey plays an important role in the efficient functioning of these value chains and economies globally. The research revealed that, on average, each year during the period examined (2017 to 2020), £1.4 trillion of capital was intermediated in Jersey and this supported £170.3 billion of global economic output, 5.1 million jobs worldwide, and £73.3 billion in associated wages, through global value chains facilitated by the Island. This also means that for every job in Jersey’s financial services sector, the value chains facilitated support of an additional 380 jobs globally.

It is a powerful piece of work. The research highlights Jersey’s global reach and the positive value our Island’s finance industry adds to international markets. We expect these findings to be of great interest to our industry and invaluable in helping us promote Jersey’s contribution globally as an IFC.

Another big theme for the finance industry this year was sustainable finance, particularly with the lens of the world watching the COP26 summit.

Sustainability, in general, has become a strategic priority in recent years and the dramatic events of the global pandemic placed environmental, social and governance thinking into even sharper focus.

As a forward-thinking IFC, we responded to the speed of change and acted quickly to position ourselves as an integral part of the journey ahead. And with the support of Equilibrium Futures, we did just that.

In March, we launched a sustainable finance strategy and vision – a vision that Jersey will be recognised by clients, stakeholders and other partners as the leading sustainable international finance centre in the markets it serves by 2030. I am certain our financial services industry, alongside Island partner organisations, can capitalise on Jersey’s strengths and work together to support the growth of sustainable finance and its contribution to environmental and social change.

Critically, the strategy is set against the backdrop of Jersey’s government setting itself the ambitious target of making the Island carbon neutral by 2030 – so it has been important for our strategy to be inclusive and sensitive to the efforts of the Island’s leaders, regulators and the people of Jersey in realising that ambition.

Overall, it has been a positive year for Jersey, the IFC. Jersey’s credentials as a reputable jurisdiction have set us apart from other IFCs in this challenging period – and put us in a leading position to support clients with their future ambitions.

I look forward to continuing our work with local and international partners in promoting Jersey’s vital role in supporting better futures for local and global economies.

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