Over the past year, Jersey’s funds market has demonstrated remarkable resilience and growth, solidifying its position as a leading global hub for alternative investment funds. The latest data reveals significant advancements across various sectors, underpinned by a sophisticated infrastructure and a proactive approach to evolving market dynamics.
The Market
The value of Assets Under Administration (AUA) in Jersey’s funds industry reached an all-time high of £497.7 billion as of June 2024, marking a 6.1% year-on-year increase. This growth is particularly noteworthy given the prevailing high-interest rate environment, underscoring Jersey’s robust financial ecosystem. The number of fund vehicles also saw an uptick, with a total of 2,450 funds and sub-funds serviced in Jersey, representing a 2.5% annual rise.
Private equity and venture capital funds continue to dominate Jersey’s funds landscape, accounting for £366.6 billion of the total AUA. This sector experienced a 9% increase compared to the previous year, highlighting sustained investor confidence and interest. Real estate funds hold the second position with £53 billion in assets, followed by exchange-traded commodities at £18.3 billion.
The industry also witnessed the launch of 145 new sub-funds between June 2023 and June 2024, collectively valued at £20.1 billion. Notably, over 90 of these were private equity or venture capital products, emphasising the continued appeal of these asset classes.
Emerging Trends for 2025
Diversification of Global Partnerships
Jersey’s funds industry is increasingly characterized by its global reach. The number of funds serviced for U.S. fund managers and promoters has grown by 56% over the past five years. European connections have also strengthened, with a 106% increase in funds associated with Sweden and a 44% rise with Switzerland. The UK remains a core market, exhibiting a steady 40% growth in fund numbers over the same period.
Rise of Private Debt Funds
Private debt continues to gain traction within Jersey’s funds sector. The number of private debt fund vehicles established has more than tripled over the past five years, reflecting a broader industry trend towards alternative lending and credit strategies.
Innovation in Private Markets
The International Stock Exchange (TISE), based in the Channel Islands, is capitalising on the global decline in initial public offerings by launching a platform for trading shares in privately held companies. This initiative caters to companies that prefer to remain private, allowing them to control share transactions and prices. Early adopters, such as the garden centre group Blue Diamond, have already utilised this facility. TISE plans to onboard more companies and explore tokenisation for closed-end funds, positioning itself uniquely amidst competition from larger exchanges.
Technological Integration and Digital Assets
Jersey is proactively enhancing its capabilities in the digital assets space. Efforts are underway to strengthen the island’s proposition in tokenization, reflecting a commitment to embracing technological advancements and meeting the evolving needs of investors.
Sustained Growth in Fund Administration Services
Service providers in Jersey continue to play a pivotal role in the industry’s success. The Aztec Group, for instance, has maintained its position as the largest fund administrator for the ninth consecutive year, overseeing US$253.2 billion in assets. This consistency underscores the high level of expertise and reliability offered by Jersey-based administrators.
Jersey’s funds market is poised for continued growth and diversification throughout 2025. The island’s ability to adapt to global market trends, foster international partnerships, and invest in technological innovation positions it as a formidable player in the global funds industry. As alternative asset classes like private equity, venture capital, and private debt gain prominence, Jersey’s sophisticated and evolving financial ecosystem is well-equipped to meet the demands of investors and fund managers alike.
INDUSTRY A-Z: Funds Lingo
A – Assets Under Administration (AUA) – The total value of assets managed by a fund administrator but not necessarily owned by them.
B – Beneficial Owner – The person or entity that ultimately owns or controls an asset, even if it is held in another name.
C – Collective Investment Fund (CIF) – A structure pooling capital from multiple investors for investment in various asset classes.
D – Due Diligence – A compliance process involving verification of investors, fund managers, and transactions to prevent financial crime.
E – Economic Substance – Regulatory requirements ensuring that certain financial entities in Jersey have substantial activity and presence on the island.
F – Fund Administrator – A company responsible for the operational and financial management of investment funds.
G – General Partner (GP) – The entity managing a limited partnership fund and responsible for decision-making and liabilities.
H – HIGH-NET-WORTH INDIVIDUAL (HNWI) – A wealthy investor meeting specific financial thresholds, often targeted by private equity and hedge funds.
I – International Stock Exchange (TISE) – A Jersey-based exchange providing listing services for investment vehicles and bonds.
J – Jersey Private Fund (JPF)
A streamlined, lightly regulated fund structure available to a maximum of 50 investors.
K – Know Your Customer (KYC) – A regulatory process ensuring financial institutions verify the identity and risk profile of clients.
L – Limited Partnership (LP) – A common fund structure where one or more general partners manage investments while limited partners contribute capital.
M – Management Shares – Shares giving holders decision-making power within a fund, typically held by the fund’s management team.
N – Net Asset Value (NAV) – The value of a fund’s assets minus liabilities, used to determine investor returns.
O – Offshore Fund – A fund domiciled outside the investor’s home country, often for tax efficiency and regulatory flexibility.
P – Private Equity (pe) – A category of investment funds that acquire equity stakes in private companies with the aim of enhancing value.
Q – Qualified Investor – An investor who meets specific wealth or experience criteria, allowing them to access sophisticated investment products.
R – Real Estate Investment Trust (REIT) – A fund that invests in property and provides investors with real estate exposure.
S – Special Purpose Vehicle (SPV) – A separate legal entity created for specific investment or financing purposes, often used in fund structuring.
T – Tokenization – The process of converting investment assets into digital tokens for fractional ownership and blockchain-based trading.
U – Undertakings for Collective Investment in Transferable Securities (UCITS) – A regulated investment fund structure allowing cross-border distribution in the EU.
V – Venture Capital (VC) – A type of fund that provides early-stage investment to startups and high-growth potential companies.
W – Withholding Tax – A tax deducted at source on income earned by foreign investors, often mitigated by Jersey’s tax treaties.
X – Exchange-Traded Fund (ETF) – A type of investment fund traded on stock exchanges, providing liquidity and diversification.
Y – Yield – The income return on an investment, typically expressed as a percentage.
Z – Zero-Tax Regime – Jersey’s corporate tax policy, which exempts most funds from taxation to attract international investment.
