Jersey Finance Funds Conference, 2017

March 20th, 2017 by

We are proud sponsors of the networking lunch at the 2017 Jersey Finance Annual London Funds Conference. The conference, being held at 8 Northumberland Avenue on Tuesday 21st March, will examine the significant geopolitical shifts witnessed throughout 2016 and the political, market and regulatory implications for the global funds industry. We look forward to seeing you there. For more information, or to book tickets, please visit here.

ESMA underlines Jersey’s European market access certainty

July 25th, 2016 by

Jersey’s strong position as a jurisdiction for marketing alternative investment funds into the European investor market has been further underlined through an announcement by an EU body that supervises funds activity.

In an announcement today (19 July) relating to the extension of the funds passport to twelve non-EU countries under the Alternative Investment Fund Managers Directive (AIFMD), the European Securities and Markets Authority (ESMA) confirmed that Jersey was one of only five non-EU jurisdictions to have no obstacles at all in being able to apply the passport.

ESMA’s mission is to enhance investor protection and promote stable and orderly financial markets. In July 2015 ESMA recommended that Jersey should be granted an AIFMD passport and today’s announcement, which reiterates that advice, will now be considered by the European Commission, Parliament and Council.

Growth in fund industry

The number of Jersey-based fund promoters has almost doubled over the past five years. At the end of June 2016, there were 134 Jersey-based fund managers, up 5% annually. In addition, reflecting the flexibility of Jersey’s funds regime, managers also continue to widely use the national private placement regime option available in Jersey, with more than 100 managers and 200 funds currently authorised by the Jersey Financial Services Commission (JFSC) to market into Europe under AIFMD.

The latest figures for Jersey’s investment funds sector show that ongoing growth in Jersey’s funds industry, which rose to £228.4bn in the first quarter of this year to the second highest level since 2008, is being driven by the alternative asset classes and strong performances in private equity (up 10% year-on-year) and real estate funds activity (up 20% year-on-year) in particular.

Flexible regime

Geoff Cook, CEO, Jersey Finance, said: “The certainty of European market access that Jersey is offering to alternative fund managers is clearly having a positive impact on our alternative funds activity, both in terms of fund servicing levels and in growing the fund management community. Managers appreciate the flexibility Jersey offers in terms of accessing Europe through private placement or, in due course, the passport, as well as a regime for funds activity that is outside Europe.

“What ESMA’s latest announcement shows is that satisfying ESMA’s criteria is not straightforward for all jurisdictions and that Jersey’s foresight to create an AIFMD equivalent regime is now putting it in a very strong place.”

First published by Jersey Finance July 2016

Jersey Finance welcomes MONEYVAL endorsement of beneficial ownership framework

May 27th, 2016 by

A major new report published by MONEYVAL underlines Jersey’s ability to combat financial crime through a sophisticated system of capturing ownership information about entities and structures in the jurisdiction, according to Jersey Finance.

Published today (24 May), the report, from the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), finds that Jersey’s beneficial ownership regime puts it at the forefront of the transparency agenda:

“Jersey’s combination of a central register of the UBO with a high level of vetting/evaluation not found elsewhere and regulation of TCSPs of a standard found in few other jurisdictions has been widely recognised by international organisations and individual jurisdictions as placing Jersey in a leading position in meeting standard of beneficial ownership transparency.”

The 300-page report also highlights that Jersey is compliant or largely compliant with 48 of the 49 Financial Action Task Force (FATF) Recommendations (2003), placing it in the top tier of jurisdictions assessed under those criteria, whilst also concluding that Jersey is “a well-established international financial centre, with a mature and sophisticated AML/CFT regime”.

Publication of the report is the culmination of a comprehensives and rigorous evaluation which began in January 2015 and which examined both the legislative and regulatory frameworks in Jersey and the effectiveness of those frameworks in combating financial crime.

Geoff Cook, CEO, Jersey Finance, commented:

“This is an excellent report for Jersey, coming from the Council of Europe’s experts in this area and placing it unequivocally in the top tier of jurisdictions globally regarding transparency and countering financial crime. Not only does it confirm that Jersey’s beneficial ownership regime is of a uniquely high calibre globally, it also reflects that the wider frameworks and supervisory systems in place set it apart from most other jurisdictions.

“In a rapidly shifting global landscape, however, there is no room for complacency, and in that vein, where the report does make recommendations, in particular in some quite specific measures to look at higher volumes of prosecutions and confiscations, I am pleased that there is already progress in those areas in tandem with implementing the more recent revised FATF recommendations and the EU 4th Money Laundering Directive. The message is clear, Jersey is at the cutting edge in terms of combating financial crime and intends to maintain that leading position.”

First published by Jersey Finance Limited May 2016

Real assets – a once in a lifetime opportunity

March 31st, 2016 by

At the Jersey Finance Funds Conference last week we heard from Bill Hughes, head of real assets at Legal and General Investment on the rise of real assets as an investment opportunity. He acknowledged that real estate and infrastructure have traditionally been seen as the ‘poor cousin’ of other asset classes but with the world changing rapidly around us there has never been a better time to look at investing in real assets.

He said opportunities, particularly in the UK, are increasing not decreasing and this is due to the increasing importance of relations between the public sector and private capital. Real assets are important and appealing due to investors and investment funds de-risking and large pension funds thinking about flight to stable assets. There is an illiquidity premium on real assets and also inflation matching characteristics that make them ideal investments in an uncertain world.

However, there are funding sources pulling out. A lack of public money is leaving some projects looking for finance. Banks are pulling out of much of the market. Bill thinks this is a ‘once in a lifetime opportunity for private capital to invest in social infrastructure’. This is infrastructure that is crucial to society – hospitals, schools, prisons, transport and energy infrastructure. Its importance (and therefore value as a real asset) is not going anywhere anytime soon.

We are at a point, according to Bill, where most social assets, and especially those needed to be built in the next 10 years, can be owned by the private sector. Renewables, HS2 rail stations etc all still need building.

Legal and General also see huge potential in the build to rent sector. The UK has a housing shortfall of hundreds of thousands of homes every year. Elsewhere in Europe the build to rent sector is booming and L&G think there is an opportunity to develop professionalised rental property in UK cities – a fantastic opportunity for real estate funds, a traditional strength of the Jersey finance industry.

In fact, L&G’s issue is not finding capital for projects; it is finding projects for the ‘wall of capital’ ready to invest in the sector. But, like anything else, there is the looming shadow of Brexit. Decisions are being delayed, according to Bill, to wait and see what the future will hold.

OECD looks to simplify international tax

March 17th, 2016 by

Addressing the recent Jersey Finance Funds Conference, Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration, said that co-operation was at the heart of international tax matters. Looking back seven or eight years, Pascal noted that it was ‘angry people in the street’ that had kick-started tax reform. Governments needed to react and the sense of voters was that governments were letting businesses and the rich avoid paying tax by using weaknesses in international tax laws.

The OECD are on the side of growth, but they also want to ensure tax is paid in the most appropriate place. For them, avoiding double taxation is as crucial as ensuring tax is paid in the right jurisdiction. Pascal began by discussing the first key measure, tax transparency. With all but one OECD country signed up to exchanging tax information and all but four ready to move to automatic exchange it showed, he said, that international finance centres like Jersey were already participating in a new, more positive international tax community.

The introduction of BEPS, he said, was another positive. ‘People on the streets want corporations and the rich to pay tax, in their jurisdiction, and why shouldn’t they?’ he said. BEPS’ introduction will ensure companies must have ‘substance’ in a jurisdiction in order to effectively claim domicile there. It will be uncomfortable, he said, for companies that have benefited from globalisation without restriction or regulation, but necessary to the future growth of the global economy.

In the panel session that followed Pascal’s talk there were some concerns raised. While Jersey is seen as an example of a jurisdiction that will flourish under the new rules, with businesses relocating to the island and employing staff and utilising office space and other service providers (in other words giving themselves substance) there are areas where more clarity is needed.

Debt, for example, was highlighted as something that needed to be kept at top of mind. Simon Witney, the chairman of the BVCA Legal and Technical Committee, said that, as it stands currently, BEPS has the potential to penalise companies using debt to grow their businesses and complicate the use of debt by international businesses.

There might be a pause in development however, for the Brexit referendum to run its course, but overall the view of the conference was that the post BEPS world will be full of opportunities for Jersey.

Brexit and Trump fail to dampen optimism of funds industry

March 9th, 2016 by

The Jersey Finance Funds Conference, held in London each year, is a good barometer of the health of the funds sector in Jersey and indeed globally. This year conversation, both in the panel sessions and in the breaks, was dominated by industry specific issues, particularly tax co-operation and BEPS, but also by the impending referendum on Brexit and the surprising success of Donald Trump’s candidacy for presidential office.

Uncertainty caused by the twin pillars of Britain leaving the EU and who knows what happening in the States is not welcomed by business, so most statements during the day came with a big caveat. Geoff Cook summed it up when he asked if the political situation was ‘more complicated or just plain crazy?’

But, despite having one eye on future uncertainty, funds practitioners in Jersey and London are optimistic for the future. The value of funds in Jersey has increased by 15%, the island is well set with agreements in place for third country status cementing positive relations with the EU and with OECD experts welcoming the island’s approach to BEPS.

It was stressed several times during the day, none more so than by Ben Robins of the Jersey Funds Association that in a world where international business is expected to have real substance where it pays tax that Jersey, with its network of international finance businesses, skilled practitioners and competent and consistent regulators and lawmakers is well set to benefit in the modern international business community.

BBC journalist Nick Robinson presented another challenge for the international finance community by highlighting the resurgence of grass-roots politics. Whether it is Jeremy Corbyn in the UK or Donald Trump or Bernie Sanders in the US, anti-establishment politicians are gaining support with ‘average’ voters. ‘How do you maintain wealth creation through developing the finance industry when voters don’t think it is working for them?’ was the question posed by Robinson which will be a key challenge for international finance in 2016.

Moore Stephens LLP named ‘Best Hedge Fund Accountancy Firm’

January 21st, 2016 by

Moore Stephens LLP has been named ‘Best Hedge Fund Accountancy Firm’ and ‘Hedge Fund Advisory Provider of the Year’ at the prestigious 2016 AI Hedge Fund awards. These awards recognise the strength of our expertise in the sector as well as the combination of skill, hard work and dedication of our team.

Lorraine Bay, Head of Moore Stephens Financial Services Group, said: “With the hedge fund industry evolving at a rapid pace over the course of the last decade, we have seen drastic and far-reaching changes. Not only has the complexity and innovations of this market increased exponentially, but so too have the regulatory demands and governance required.”

The 2016 Hedge Fund awards, hosted by Acquisition International, are now in their fourth season. These awards celebrate excellence and achievement in the hedge fund sphere and honours the key influencers within the industry.

Jersey’s credit rating confirmed

May 28th, 2015 by

The States of Jersey’s international credit rating issued by Standard & Poors (S&P) has been affirmed as one of the best that the credit ratings service awards.

S&P has affirmed its “AA+/A-1 + long and short-term sovereign credit rating, with a stable outlook” for the States of Jersey.

In its report, S&P noted: “The AA+ ratings on Jersey reflect our view of its mature political and institutional setting, transparent economic decision-making process, wealthy economy and significant fiscal flexibility supported by a high net general government asset position.”

The report also states that Jersey “has an open and wealthy economy and recognises that strong revenue performance historically has seen government accumulate substantial financial assets.” It is these assets that have supported the subdued financial sector revenues over the last couple of years.

Minister for Treasury & Resources, Senator Alan MacLean, said: “It is positive news for Jersey that an international credit rating institution such as S&P continues to recognise the strength of our Balance Sheet. We have had a full and frank discussion about our fiscal position with them and our plans to deal with it and this this has provided the comfort they need to maintain their level of rating with their outlook view remaining stable.”

The AA+ credit rating was first assigned in November 2013 in order that the States was able to proceed with the £250 million bond earmarked to provide investment in affordable housing over the next 10 years.

Within the report, S&P also detail the circumstances in which they would either raise or reduce the Island’s credit rating and its rationale for awarding AA+.

First published by Jersey Finance Limited, May 2015

Strong uptake in private placement as Jersey funds industry reaches seven year high

March 5th, 2015 by

A strong performance in Jersey’s funds sector in 2014 has seen the value of fund assets administered in the jurisdiction increase by almost one fifth year-on-year to reach the highest level in seven years.

The latest figures for Jersey’s finance industry, collated by the Jersey Financial Services Commission (JFSC) for the period ending December 2014, show that the net asset value (NAV) of funds under administration in Jersey grew by £23.5bn over the final quarter of last year to now stand at £228.9bn, representing an increase of 19% compared to December 2013 and the highest level since December 2008. In addition, the total number of regulated funds rose by 19 during the quarter.

This was led by another strong performance in the alternative asset classes, which account for 72% of the total NAV, with the value of hedge fund business growing by 46% year-on-year, real estate business growing by 32% to its highest ever level, and private equity maintaining a steady increase of 5% in the same period.

Meanwhile, six months after the implementation phase for the Alternative Investment Fund Managers Directive (AIFMD) ended, Jersey’s private placement route into Europe continues to grow in popularity amongst fund managers. Figures from the JFSC show that 60 alternative investment fund managers (AIFMs) have received authorisation under Jersey’s AIFMD private placement regime, whilst 186 Jersey alternative investment funds (AIFs) are being marketed into Europe through private placement regime. In addition, 14 AIF depositary notifications have now been received under AIFMD from five different Jersey AIF depositary service providers.

Geoff Cook, Chief Executive, Jersey Finance, commented:

“The 2014 figures for Jersey’s funds industry make impressive reading. Not only has the value of funds business reached its highest level since 2008, but the sizeable annual increase of almost 20% is particularly pleasing in a global fundraising environment that is still relatively challenging. This growth is symptomatic of the confidence alternative funds professionals have in Jersey and why a number of major alternative fund houses have made the move to establish or expand their presence in the jurisdiction recently.”

Ben Robins, Chairman, Jersey Funds Association, added:

“The fact that there has been a strong upward trend across the core private equity, real estate and hedge fund asset classes as well as the debt and infrastructure fund spaces in the six months since AIFMD was implemented is clearly pleasing. The number of Jersey domiciled managers receiving authorisation to privately place and the number of funds being marketed into Europe through private placement under AIFMD is on the rise, and this goes to show that managers clearly like the flexibility and robust nature of Jersey’s regulatory framework.”

The warm reception afforded to private placement under AIFMD and trends within the European fund structuring arena, including ESMA’s recent call to evidence, will feature on the agenda at Jersey Finance’s Annual London Funds Conference, entitled ‘Winning Moves’, on 19th March. The event will also feature discussions on the global regulatory landscape and trends in real estate and infrastructure investment fund structuring from the US, Middle East and Asian investors. Further information can be found at, where places can also be booked.

First published by Jersey Finance, March 2015

Stable 2014 for Jersey’s finance industry as funds industry reaches record levels

March 5th, 2015 by

The latest figures for all sectors of Jersey’s finance industry reflect an overall good performance, with the funds sector once again leading the way and recording its fourth consecutive quarter of growth to reach its highest level in seven years.

The statistics highlight that the net asset value of regulated funds increased by £23.5 billion in the final quarter of 2014, and by around 19% year-on-year, to reach £228.9 billion, the highest figure since December 2008. This was led by another strong performance in the alternative asset classes, with the value of hedge fund business growing by 46% year-on-year, real estate business growing by 32% to its highest ever level, and private equity maintaining a steady increase of 5% in the same period.

Although bank deposits fell slightly they remain stable, whilst now almost 19% of deposits emanate from the Middle and Far East combined. The company formation rate for the final quarter of 2014 was at its highest since June 2008 with 772 company formations.

The latest statistics, collated and prepared by the Jersey Financial Services Commission, are for the three month period ending 31st December 2014. Headline figures include:

  • The total value of banking deposits held in Jersey decreased by £4.2bn from £136.6bn to £132.4bn during the fourth quarter of 2014 representing an annual decrease of just over 5%.
  • The net asset value of regulated funds under administration increased by £23.5bn from £205.4bn to £228.9bn during Q4 2014, a year-on-year increase of 19%.
  • The total number of regulated collective investment funds increased by 19 from 1,304 to 1,323 over the quarterly period, whilst as at end of the fourth quarter of 2014, there were 123 active unregulated funds (of the 208 unregulated funds notified to the Commission).
  • The value of total funds under investment management decreased slightly by £0.5bn from £21.3bn to £20.8bn during the fourth quarter of 2014.
  • The total number of live companies on the register stood at 32,717 at the end of Q4 2014, while there were 722 company formations in the final quarter of the year, the highest number since June 2008.

Geoff Cook, Chief Executive, Jersey Finance, commented:

“The latest figures for all sectors of Jersey’s finance industry reflect an overall good performance, with the funds sector leading the way and recording its fourth consecutive quarter of growth to reach its highest level in seven years. Bank deposits fell slightly but remain stable and almost 19% of deposits now emanate from the Middle East and the Far East combined.

“The figures for our funds industry make impressive reading. Not only has the value of funds business reached its highest level since 2008, the sizeable annual increase of almost 20% is particularly pleasing in a global fundraising environment that is still challenging.

“The total value of funds under investment management decreased slightly by

£0.5bn from £21.3bn to £20.8bn during Q4 and the company formation rate for the final quarter of 2014 was at its highest since June 2008 with 772 company formations.’’

First published by Jersey Finance, March 2015