Jersey’s strong position as a jurisdiction for marketing alternative investment funds into the European investor market has been further underlined through an announcement by an EU body that supervises funds activity.
In an announcement today (19 July) relating to the extension of the funds passport totwelve non-EU countries under the Alternative Investment Fund Managers Directive (AIFMD), the European Securities and Markets Authority (ESMA) confirmed that Jersey was one of only five non-EU jurisdictions to have no obstacles at all in being able to apply the passport.
ESMA’s mission is to enhance investor protection and promote stable and orderly financial markets. In July 2015 ESMA recommended that Jersey should be granted an AIFMD passport and today’s announcement, which reiterates that advice, will now be considered by the European Commission, Parliament and Council.
The number of Jersey-based fund promoters has almost doubled over the past five years. At the end of June 2016, there were 134 Jersey-based fund managers, up 5% annually. In addition, reflecting the flexibility of Jersey’s funds regime, managers also continue to widely use the national private placement regime option available in Jersey, with more than 100 managers and 200 funds currently authorised by the Jersey Financial Services Commission (JFSC) to market into Europe under AIFMD.
The latest figures for Jersey’s investment funds sector show that ongoing growth in Jersey’s funds industry, which rose to £228.4bn in the first quarter of this year to the second highest level since 2008, is being driven by the alternative asset classes and strong performances in private equity (up 10% year-on-year) and real estate funds activity (up 20% year-on-year) in particular.
Geoff Cook, CEO, Jersey Finance, said: “The certainty of European market access that Jersey is offering to alternative fund managers is clearly having a positive impact on our alternative funds activity, both in terms of fund servicing levels and in growing the fund management community. Managers appreciate the flexibility Jersey offers in terms of accessing Europe through private placement or, in due course, the passport, as well as a regime for funds activity that is outside Europe.
“What ESMA’s latest announcement shows is that satisfying ESMA’s criteria is not straightforward for all jurisdictions and that Jersey’s foresight to create an AIFMD equivalent regime is now putting it in a very strong place.”