Bright Future Ahead For Jersey Funds Industry
Friday, April 01, 2011

The 2011 Annual Dinner of the Jersey Funds Association - attended by a record 370 people - included an address by JFA Chairman, Nigel Strachan, on the challenges that the island has overcome in previous years, emanating from the global financial crisis, and the opportunities that lie ahead for Jersey in 2011 and beyond.

Strachan opened by stating that during 2010 the funds industry encountered several issues – namely, lack of leverage, liquidity and clarity with regards to international regulation – but yet the industry maintained steady, respectable growth.

Strachan surmised that conditions could only improve, noting a significant rebound in deal activity, but did counterbalance this by observing that - while being supported by improving credit conditions - funds actively seeking deals in 2010 did so cautiously, wary of inflated prices.

Confidence in an economic recovery globally, firmed in Q4 2010, Strachan said, providing an optomistic outlook for the remainder of 2011. Another important factor identified by Strachan was the new clarity over the terms of the EU's Alternative Investment Fund Managers Directive, with favourable terms now having been ascertained.

Ending 2010, the Net Asset Value (NAV) of funds administered in Jersey increased by GBP8.8bn (up 5%); the total number of funds in Jersey increased by 54; and, the asset value of private equity funds administered grew by 18.4% (GBP6bn), further evidence of improving conditions for the industry, Strachan evidenced.

Focusing on 2011, Strachan told attendees that with the imminent introduction of new separate and incorporated limited partnerships forms in Jersey, fund managers will be provided with further choice, boosting Jersey’s attractiveness to prospective new fund creators. Certainty over the terms of the AIFMD will also bolster the jurisdiction as a place to do business, removing any uncertainty that Jersey may fall foul of EU rules.

Concluding, Strachan noted that Jersey has recently been recognized as the most competitive offshore jurisdiction, in the latest Global Financial Centres Index, for the fourth consecutive year, and that Jersey has been recognized as being in the ‘top division’ of international finance centres.

Accordingly, Jersey is expected to build on last year’s growth, and achieve a prosperous 2011 leaving the toils of the global financial downturn a distant memory (to forget).