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Jersey sees an increase in private placement and consults on enhancing funds regime

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The number of Jersey-registered alternative investment fund managers marketing into Europe through national private placement regimes (NPPRs) under the EU Alternative Investment Fund Managers Directive (AIFMD) continued to rise in H1 2016.

According to figures from the Jersey Financial Services Commission (JFSC), as at June 2016, 115 alternative investment fund managers (AIFMs) had been authorised in Jersey to market into Europe through NPPRs, up 11 per cent compared to December 2015. Over the same period, the number of Jersey alternative investment funds (AIFs) being marketed into Europe through NPPR stood at 251, representing a 9 per cent increase.

These figures come shortly after the European Securities and Markets Authority (ESMA) made its further recommendation, on 19 July, that Jersey should be amongst those ‘third countries’ granted an AIFMD passport.

In addition, the Government of Jersey and the JFSC launched a joint consultation this week aimed at enhancing Jersey’s funds regime. The consultation seeks to simplify and rationalise numerous aspects of Jersey’s funds environment, with the paper confirming the intention to introduce new products to the market. 

These are anticipated to include a new manager-led Jersey registered alternative investment fund (JRAIF). The JRAIF will be supervised by the JFSC by proxy as it will be the relevant AIFM who will be responsible for ensuring the fund’s AIFMD compliance. The consultation also provides detail around a proposed new universal definition of a ‘Professional Investor’ and consolidation across certain fund types. 

The latest figures for Jersey’s investment funds sector show that Jersey’s funds industry continues to grow, with the Net Asset Value of assets under administration rising to £228.4bn in the first quarter of 2016, the second highest level since 2008. This is being driven by alternative asset classes and in particular by strong performances in the private equity (up 10 per cent annually) and real estate (up 20 per cent annually) asset classes.

Geoff Cook, CEO, Jersey Finance, says: “It’s clear that the alternative fund management community are continuing to find real appeal in the optionality and certainty of European market access Jersey is able to offer. The latest figures show that the appetite to use Jersey’s existing NPPR route is consistently strong amongst managers, whilst the potential for an AIFMD passport in the future is giving managers real confidence in Jersey’s long-term future as an alternative funds domicile.”

Mike Byrne, Chairman, Jersey Funds Association, adds: “As a jurisdiction, we recognise that we need to continue to enhance our funds environment in a new regulatory landscape and this latest consultation forms a significant part of that. As well as making Jersey’s regime clearer, simpler and more streamlined, it also demonstrates that the jurisdiction is committed to bringing innovative products, such as the manager-led registered fund product, to the market.

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