Industry events / 15 October 2019

Comment: Jersey’s alternatives strengths highlighted to London funds professionals

Michael Newton and James Milner

Jersey’s ability to provide a platform of certainty against a backdrop dominated by Brexit and wider geopolitical change was highlighted to an audience of senior London funds professionals earlier this month.

Both Michael Newton, Group Head of Fund Services, and James Milner, Associate Director within the firms’ ManCo business, were amongst the near 400 delegates at this year’s Jersey Finance London Funds Conference, which served to highlight Jersey’s ability to provide a robust regulatory environment and a cutting-edge infrastructure for cross-border funds.

With panellists at the event pointing to the long-term growth anticipated in allocation towards alternatives from both institutional investors and, increasingly, private and family offices, the clear message was that Jersey was well positioned to continue to assert its strengths as a specialist alternatives centre.

Commenting on the ramifications of Brexit in particular on the European funds industry, Michael Newton said:

“The message that Jersey is in a really good position to continue to support non-EU fund managers post-Brexit came across really strongly at the conference – in fact, we see a real opportunity for Jersey to play an increasingly important role in enabling managers to raise capital in Europe easily, robustly and cost-effectively in the new European landscape.

“National Private Placement Regimes (NPPRs) will not be affected by Brexit and Jersey funds will continue to be able to market into the EU in this way for the foreseeable future. That’s good news for managers, with private placement being much quicker and more cost-effective than full onshore blanket AIFMD passporting – and with 97% of AIFs in Europe only marketing to three countries or less, private placement should be the first port of call for the majority of managers.

“Crucially, UK lawyers at the conference were clearly very confident in Jersey as a bridge to Europe and alluded frequently to their preference in using Jersey structures as the process is so straightforward. In addition, Jersey has already strengthened its arrangements with the UK in the event of a ‘no deal’ departure, so all in all, Jersey is very well positioned in terms of distribution.”

Pointing to a growing focus on governance and oversight in fund operating models, James added:

“The consensus at the conference was that Jersey is in a good place in respect of the new economic substance rules that came into force earlier this year. The governance standards that already exist in the island, together with the size of the industry and access to local specialists, means that the new requirements should not have a huge impact, particularly for private equity and real estate asset managers who are already taking a ‘best practice’ approach. 

In fact, delegates were told that, with Jersey being recognised by the EU and OECD as a compliant and cooperative jurisdiction, these new rules would actually provide a strong platform for growth in management activity in the island.”