Private investments funds are one of the most successful fund
types in Jersey. They have been developed to accommodate bespoke
professional or institutional investor structures where investment
opportunities are to be limited to a smaller group of investors,
usually a select number of institutional or semi institutional
investment groups or friends and family, without the regulatory
burden and costs that are usually associated with public funds. The
very private fund is therefore frequently used for institutional
private equity, real estate fund structures, and/or family office
Due to the private nature of the fund, it can only be offered to
a maximum of 50 people and have no more than 15 investors. The fund
can be open or closed ended. Investors who have redeemed can be
replaced with new investors provided the amount of offers does not
exceed 50 and the number of investors at any given time does not
exceed 15. All investors are required to sign a specific risk
warning acknowledging that the fund structure is not licensed by
the Jersey Financial Services Commission. They are also subject to
local anti-money laundering regulations and procedures.
Each investor must be a professional investor which is the case
if each investor invests a minimum of £250,000 (or currency
equivalent) or if the investor can be considered to have
professional experience with investments in general by virtue of
his profession or business.
If these conditions are fulfilled the fund and its functionaries
(such as a general partner or investment manager) can take
advantage of a general exemption under the Financial Services
(Jersey) Law 1998. There is thus also the possibility to establish
a Jersey company that acts as investment manager or advisor for the
fund without having to demonstrate previous investment management
experience and having to obtain regulatory approval or a licence to
perform this function.
The fund will have to obtain a consent under the Control of
Borrowing (Jersey) Order 1958, which is the usual regulatory
consent for any Jersey entity issuing units, including any company
issuing shares. This consent is usually granted within 5 business
days at the one off cost of £200 for companies.
Very private funds are not subject to any regulations for
valuations and pricing, investment restrictions or investment
There is also no requirement for a prospectus or an audit of the
fund, although in reality every promoter will prefer to have the
fund independently audited and circulate a term sheet describing
the investment objective, specific risk warnings and make any
disclosure that is relevant to the fund's investment
The very private fund can be established in all legal structures
available under Jersey Law including non par value share companies,
protected cell companies, limited partnerships and unit trusts.
Limited partnerships are in particular popular for private equity
and real estate investments, whilst private unit trust structures
have become popular for UK real estate investment and the related
Stamp Duty and Land Tax planning or as feeder funds into UK
Very private funds are not subject to taxation in Jersey
provided that all income and profits other than bank interest are
generated outside of Jersey. They also fall outside of the scope of
the European Savings Directive so that gross profits can be
distributed to investors.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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