Jersey and the US – A strategic friendship
Rhea Hood, Head of CRM - EMEA
Jersey’s mature funds offering has ensured that the jurisdiction is a solid solution for US Managers wishing to raise capital from European and non-European investors over the past few decades.
Jersey is well known internationally for its robust regulatory framework, fiscal neutrality and quality services providers. Investor confidence in the jurisdiction continues to be strong and Jersey’s promotional agencies and industry associations have been active in positioning Jersey’s place with all major financial markets worldwide.
The adoption of the Alternatives Fund Investment Managers Director (“AIFMD”) by Europe has undoubtable led to smaller financial centres such as Jersey reviewing their offering and ensuring that the USPs of the jurisdiction are flexible and nimble enough to adopt to the changing times. Jersey has seen significant interest from non-European investment managers including those based in the US, wanting to raise money in the European Union from a select number of member states. Jersey offers a robust regulatory alternative to the full AIFMD-compliant product from within the EU which is not only more cost effective, it is often much quicker to market. While the individual national private placement regimes remain in force in the individual member states within Europe, Jersey’s position remains strong.
Recent experience has shown us that US Managers are opting for parallel AIFMD compliant vehicles when raising capital globally and unfortunately for the Channel Islands, until the third country passport is issued this is a trend that is difficult to provide a counter-solution to the onshore EU jurisdictions such as Luxembourg. Jersey is extremely well positioned to be a jurisdiction of choice for these parallel structures once the passport is in place.
SANNE’s alternatives business continues to see interest from US managers investing in Real Estate through JPUTs as well as establishing alternative asset funds to market to a select number of EU countries as drawn on earlier. In recent months there has been an increase in unregulated single deal structures established by US managers whether this be very private fund structures or special purpose holding structures.
Jersey has in the past attracted high profile US Managers to the island and the relationship with US advisors remains strong through engagement with US investors investing into structures set up by UK/European managers using Jersey. Jersey’s links to London are strong which acts as a stepping stone to more international markets.
SANNE has seen through its acquisition of a New York based business, an increase in jurisdictional cross-selling and structuring by its global client base and given the business’s global reach, we see the funds market continuing to grow now more than ever. We also see international financial centres of excellence like Jersey continuing to have a significant foothold in this global market and with its ability to adapt and provide flexible solutions to investment managers around the world, Jersey will continue to be a reputable and significant solution for investment structuring in the future. With the geopolitical landscape currently breaking all the moulds, Jersey’s stable political environment offers a safe harbour in these uncertain times.
Authored by Rhea Hood | Director CRM - EMEA at SANNE. This article was published on 3 March 2017.