An alternatives sector that accounts for 89% of assets under management is powering Jersey’s remarkable growth.
In Jersey, as elsewhere, last year was a year like no other due to the Covid-19 pandemic. Homeworking, zero travel and a locked-down economy changed the way we live and work. Add to that the uncertainties created by Brexit, and this island jurisdiction, whose biggest customer has always been the UK, might have been expected to suffer more than most.
The overriding message from this year’s annual Funds Europe Jersey Survey, however, is that Jersey has adapted to the new situation and not just survived but thrived.
In coping with the Covid-19 pandemic, Jersey benefited both from its excellent existing infrastructure and from the deep pool of talent on the island. Previous investment in infrastructure, such as island-wide broadband that is the second-fastest in the world, allowed the jurisdiction to adapt swiftly to home working and provide the same service as usual despite Covid-19.
An increasing emphasis on trust and transparency as environmental, social and governance (ESG) investing grows in importance also worked in Jersey’s favour.
“From a Jersey perspective, this translates into strong growth in the funds sector,” says Elliot Refson, head of funds at Jersey Finance. “In 2020, our funds’ assets under management broke the US$500 billion mark for the first time, ending the year at $521 billion. This represents growth of 9% year on year, of 66% over five years and 125% over ten years.”
The engine of that growth was the alternatives sector, which now accounts for 89% of assets under management in Jersey. Assets in the private equity and venture capital segment rose by 21% during 2020 to £164.6 billion and Tim Morgan, chair of the Jersey Funds Association, noted that a number of big-ticket funds had come to market through Jersey.
This demonstrates the important position that Jersey, with its stable environment and deep pool of talent, has carved out in the alternatives market. The number of registered Jersey Private Funds (JPF), which are not included in the headline figures, also grew by almost 100 to 403 over the year.
“The fact that almost 100 new Jersey Private Funds have been registered over the year is also hugely positive, underlining both the appeal of the JPF as the go-to vehicle for professional investors and also Jersey’s ability more widely to innovate in the right areas,” says Morgan.
Overall, the alternatives sector now accounts for 89% of assets under management in Jersey. With the global investment marketplace tilting more towards alternatives in a persistently low-yield environment, the jurisdiction looks to be in pole position for future growth.
“The resilience and stability Jersey has shown has clearly resonated amongst investors and managers, as they have continued to put their faith in Jersey as a specialist high-quality centre for alternative funds,” says Joe Moynihan, Jersey Finance CEO.
Jersey’s position as a jurisdiction of choice for alternative assets is compounded by the growing importance globally of ESG investing. Our survey shows that ESG’s importance has now reached far beyond mainstream assets into alternative assets. Jersey’s offering of flexible but robust regulation, innovative vehicles such as the JPF and a tried-and-tested investment fund framework should chime with that market.
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