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Jersey Reports Strong Uptake Of Private Placement Funds

by Jason Gorringe, Lowtax.net, London
02 July, 2014

With less than one month to go until the transitional phase of the EU Alternative Investment Fund Managers Directive (AIFMD) comes to an end, Jersey is seeing a strong take-up in its private placement route into Europe.

Figures from the Jersey Financial Services Commission (JFSC) show that more than 70 percent of the 52 funds registered so far this year in Jersey have been approved to market into the EU under the AIFMD through Jersey's private placement regime. In addition, according to the JFSC, a total of 43 funds have so far been registered to market into the EU, whilst 38 fund service providers have also been approved to conduct AIFMD-related business under the regime.

Jersey's Private Placement regime, which was introduced in January 2012, is aimed at professional and sophisticated investors. Funds placed under the regime can be approved within three days. Private placement funds must either be established or managed in Jersey; be closed ended; be offered to no more than fifty investors; and only admit sophisticated investors or professional investors. Private Placement Funds are desirable due to their flexibility and because there are no prescribed investment restrictions, concentration limits, or leverage constraints.

Geoff Cook, CEO of Jersey Finance, said: "Even at this late stage, managers are still cautious about the AIFMD and its impact on their operations and cost-base, and these figures from the JFSC provide evidence that Jersey's private placement route is being warmly received by the market as an attractive flexible, robust, and cost-effective option. Given Jersey's specialist expertise in fund governance, we expect this trend to continue as those managers marketing into Europe look to avail themselves of Jersey's attractive private placement option."

"We are also seeing a rise in the number of managers considering establishing a presence here. There are more than 300 registered resident directors in Jersey who are able to take on actual portfolio management and risk supervision duties, and 1,400 regulated funds, which means that on average each director is overseeing less than five funds, so demonstrating substance for a Jersey manager is extremely straight forward."

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