Jersey has recorded the launch of 26 unregulated funds since the introduction of the rules earlier this year.
Robert Kirkby, Technical Director at Jersey Finance Limited, says that it is a solid start for the unregulated regime, despite the challenging conditions in the market: “Considering that the number of fund launches generally has slowed, the Industry is encouraged by such a promising start. We are seeing significant interest in the new regime and law firms on the Island have reported a surge of enquiries about the new rules.”
The types of fund established have varied and are truly global in scope. They include cell company structures for multi-strategy funds as well as real estate and private equity funds. Reflecting the current global interest in green issues, there have been a number of funds raising investment in the green sector including a fund investing in solar power projects and others for financing high tech, bio-tech and environmental schemes. Real estate funds have also been launched to raise finance for property and land acquisition in London, California and Brazil.
Rules for forming unregulated funds were introduced in Jersey in February. Within the new regime there is no audit requirement, no limit on the number of investors, no investment or borrowing restrictions and no requirement for Jersey service providers. Funds are launched without regulatory assessment and so provide the ability to respond almost immediately to market opportunities. The funds remain subject to Jerseys anti money laundering requirements. There are two types of fund, Unregulated Eligible Investor Funds and Unregulated Exchange Traded Funds.
The Unregulated Fund rules complement the existing Expert Fund regime which has been the catalyst for the rapid growth of the funds sector in the Island to date, now valued in excess of 240 billion.
“In the last quarter ending in June, Jersey still recorded the launch of 37 new funds in the regulated sector, despite the challenging market conditions that all jurisdictions are now experiencing,” says Geoff Cook, chief executive of Jersey Finance. “The private equity sector has been particular bullish during the last 12 months or so with the net asset value of funds rising from 16 billion to 22.5 billion to June this year, a 41 per cent increase. More generally, Jerseys reputation as an attractive base in which to hold assets will serve it in good stead during this traumatic period for the financial services industry.”
“Jersey has earned a reputation over the years for its ability to adapt and tailor its services according to the prevailing markets and Jerseys current regulatory regime, with the changes implemented this year, make us one of the most flexible European jurisdictions in the alternative fund sector,” says Richard Thomas, chairman of the Jersey Funds Association. “There is no doubt that flexibility and innovation will be crucial in maintaining the growth of Jerseys funds sector in the current global financial climate.”
D.C.