Professionals from across Jersey’s growing funds industry came together last month to explore the key trends shaping the cross-border funds landscape and celebrate Jersey’s achievements over the past year.
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 Jersey Funds Association (JFA) Annual Dinner, held at the Trinity Showground on 28th June.
Speaking at the event, Michael Johnson, JFA Chair, told the audience 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 (JPF) regime, with the total number of JPFs now standing at just over 700 – an increase of 100 since last year – whilst the total assets under administration in Jersey now sits at £520bn.
Nevertheless, he pointed to the need to maintain momentum 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.”
In particular, Michael highlighted that alternatives – including private equity, real estate and venture capital – continue to represent 90% of Jersey’s total funds business, a model that has created a stable platform of long-term capital.
However, there was now a risk of that model being buffeted by global trade-winds, with Michael urging caution in the face of increased competition as market conditions improve: “There are brighter times on the horizon but we cannot be complacent. 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.”
Vice Chair of the 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 to 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.”
Pictured: Joel Hernandez and Michael Johnson on stage.
