A more welcoming commercial environment in <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Jersey has encouraged hedge fund promoters to look afresh at the jurisdiction as a centre of excellence for hedge funds business.
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The original springboard for this development was the introduction of an enhanced regulatory regime by the Island's regulator, the Jersey Financial Services Commission (JFSC) during the early part of 2004. The Expert Fund Guide provided promoters and other professionals with clear, pragmatic and workable criteria to help them establish funds in Jersey. The Non Domiciled Fund Guide which followed, introduced a treamlined authorisation process for Jersey functionaries acting for non-Jersey domiciled funds.
Whilst streamlined regulations have simplified the approval process, this was achieved without compromising the high regulatory standards associated with Jersey. A considerable amount of consultation was undertaken between the JFSC and representatives from the Jersey Funds Association, before the new Guides and associated codes of practice were formulated.
These regulations have combined with Jersey's other long standing strengths, such as its political stability, tax neutrality, high quality legislative framework and close links with the City of London; a range of attributes that are proving to be an ideal combination in attracting quality new business. Jersey, a leading international finance centre for more than four decades, had always been a prominent player in delivering fund services. However, it was recognised that the Island's regulatory model, devised when the Island's reliance was primarily on retail funds, was not matching the requirements of promoters of alternative investment strategies. The new fund regulations have helped to quickly turn
around this perception.
In a further boost, the Island authorities are showing a renewed willingness to welcome quality new business to its shores, the result of a shift in Government policy designed to help grow the economy by two per cent per annum in order to generate real economic growth. Jersey Finance, in association with the Jersey Funds Association and supported by the authorities, has launched a promotional campaign to encourage a select group of fund specialists and wealth managers to consider re-locating their international fund management activities to the Island.
Local administrators and other fund and trust professionals have received numerous
enquiries and at least two London-based hedge fund managers, with portfolios valued
at almost USD1 billion, have announced their intention to move to the Island this year. A
number of others are expected to follow.
These statistics and others confirm the confidence that the funds industry is showing in its future. Official data compiled quarterly by the JFSC show that in the 12 months to March 2005, there had been a 56% increase in the growth of assets in the specialist sector devoted to hedge funds, funds of hedge funds and alternative investment funds in Jersey. The net asset value of specialist type funds administered in Jersey is approaching £50 billion, nearly half the total value of Jersey's funds industry. The trends are encouraging and the Island is poised to become firmly established as specialist base for hedge funds business and an even stronger competitor in the alternative investment funds marketplace
within the European time zone.
Phil Austin, Chief Executive,