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

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 jsy.fi/jflfunds2015, where places can also be booked.

First published by Jersey Finance, March 2015