Tim Morgan, chair of the Jersey Funds Association, says the island’s funds play a role in value creation way beyond Jersey’s shores.
Towards the end of last year, Jersey Finance published a ground-breaking report that highlighted the value Jersey’s finance industry adds to global markets and the positive impact the work done in Jersey has around the world.
The ‘Jersey’s Contribution to Global Value Chains’ report explores the redistribution of the value of work done in Jersey – and it makes some significant findings. In particular, Jersey firms intermediate £1.4 trillion (€1.7 trillion) of global capital each year and support £170.3 billion of global economic output. That activity in turn supports millions of jobs of ordinary people, and accounts for 0.27% of total global economic activity each year. It’s an impressive contribution globally for a small jurisdiction.
For Jersey’s funds industry, the findings are significant too. The report confirms, for instance, that between 2017 and 2020, there was an increase in Jersey’s fund sector’s capital base of 71.5%, to £282.1 billion, driven largely by growth in the alternative asset classes. Though this might not be surprising to those that are familiar with Jersey’s funds sector, the impact of this work might be more so. The report finds, for example, that the capital intermediated in Jersey’s funds sector supported an average of £29.3 billion of global economic output annually – equivalent to 0.05% of world GDP. The direct GDP contribution of Bahrain in 2020 was approximately £31.1 billion.
In addition, the report shows that the reach of Jersey’s funds industry is truly global – it finds that the primary funding sources for Jersey-administered and domiciled funds include: Europe (40.9% of the total AuM), Asia (inc. Middle East) (30.4%), and North America (27.5%).
More recently, we were pleased to announce the latest figures for 2021, which showed that the value of regulated funds under administration in Jersey grew by 19% in 2021 to now stand at a record £450.2 billion with private equity, real estate, hedge, credit and infrastructure representing 89% of total funds business. Private equity business alone increased by 27% over 2021.
While we are sometimes focused on headline growth and AuM figures, our success is more about the value we are helping to add around the world. And the report shows our sector is doing just that. The redistributed capital through Jersey private equity, venture capital, infrastructure and real estate funds is utilised worldwide, generating real economic activity, translating to employment opportunities and wages for individuals. The report shows that capital from Jersey-administered funds is being used to support a wide spectrum of firms from financial services, technology, retail, healthcare and beyond.
Jersey is able to do this because of the ideal ecosystem we have developed for alternative funds, helping investor capital to go further, more efficiently to create bigger, better outcomes.
It’s why we remain committed to nurturing that ecosystem, why we continue to set out Jersey’s stall as a specialist alternative funds hub that can facilitate the deployment of good-quality capital in a range of economies across the world, and why Jersey champions the alternative asset classes for their ability to bring about tangible, positive change.
The ‘Jersey’s Contribution to Global Value Chains’ report can be found at jerseyfinance.je/our-work
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