Jersey: Back To The Beginning

Last Updated: 11 September 2014
Article by James Gaudin

Where are we? The answer, it seems, is right back where we started. The office for national statistics has recently published the latest figures for UK GDP. At the end of Q2 2014 that figure stands at GBP393.5bn. At the end of Q1 2008 the same figure was GBP392.8bn. In other words after 25 quarters the UK economy has finally recovered to pre-crisis levels. We were told that the recovery would be slow – and it has been – far slower, in fact, than the recoveries from both the 1979 (10 quarters) and 1990 (16 quarters) downturns. The downturn, from peak to trough, was much deeper than previously, with the economy shedding 7.2 per cent of GDP since 2008 compared to 5.9 per cent in the 1979 downturn and just 2.4 per cent post 1990.

So, as we return to normality (?) I thought it might be a good time to take stock and look at where we are as an offshore finance industry. Are we back where we started?

I spent a great deal of time before, during and now, it seems, after the global financial crisis talking, writing and presenting on the need for us, as an offshore finance offering, to diversify. That is both in terms of new product (and the political and regulatory framework that supports it) but perhaps more importantly new markets and jurisdictions. I have considered in detail the unstoppable economic growth of Jim O'Neil's BRICs, MINTs and the Next 11. Now I find myself focusing more and more upon the emerging African economies that occupied 11 of the top 20 global GDP growth spots in 2013.

Focussing on new markets and ensuring we have appropriate footholds in growth economies is of vital importance but, when I evaluate my own marketing initiatives – which include Hong Kong, Shanghai, Singapore, Mumbai, Delhi, Moscow and Tel Aviv – there is one jurisdiction that is more prevalent than all of the others combined and has been so since before the GFC – London, with 27 business development trips in 2013.

Unsurprisingly that trend tracks through to actual workflows too. In the case of my own practice, which is probably more emerging market focussed than some, more than 70 per cent of the transactional work flow comes via banks, financial institutions and other intermediaries in and around London. Whether we like it or not, our fortunes are inexorably linked to the City – not necessarily as a generator of trade, transactions and wealth but as a conduit for the very emerging markets we are seeking to develop.

So, how has the better than expected performance of the UK economy affected us? Are we, too, back where we started? Difficult to say. As law firms helping to structure deals or resolve issues we tend to be at the front end of any transactional uptick and it takes time for the funding and ancillary services that might involve other sectors of the market to wash through. Economic indicators and statistics are usually at least 12 months behind the market.

This is borne out by the comparative data for the financial services sector for the end of Q1 2013 and the end of Q1 2014. Value of banking deposits down 10.25 per cent (155.1bn to 139.2bn). Net asset value of Funds under administration down 4.87 per cent (205.3bn to 195.3bn). Total Funds under investment management down 2.2 per cent (22.7bn to 22.2bn). Number of regulated Funds down 4.16 per cent (1,395 to 1,337) and total number of live companies down 0.27 per cent (32,790 to 32,701). In fact the only increase, and it is a substantial one, is in the number of unregulated Funds, up 8.15 per cent (184 to 199).

So does all this make for fairly grim reading? Well, not really. The figures need to be considered in the wider context of an increasingly co-dependent international economy. Against global trends the banking, fund and investment management figures have actually been fairly robust. The simple fact is that since the second quarter of 2013 there has been a substantial increase in transactional activity resulting in higher levels of optimism and a general pick up in levels of business activity. Particularly telling has been the widespread recruitment by corporate and commercial teams in law firms across the jurisdiction. I expect this uptick to track through to the statistics in due course.

So what sort of transactional and advisory work are we seeing in our team? A snapshot follows:

Regulatory. It is perhaps no great surprise that regulatory advisory workflows are strong. We continue to advise on a number of AIFMD, FATCA and sanction based issues. Our regulatory team are also advising a number of banks in relation to capital adequacy, ring-fencing and licence consolidation issues. We are also advising two banking groups in relation to establishing a presence in the jurisdiction.

Real Estate. London property continues to dominate the headlines whilst real estate finance, refinance and acquisition remain extremely buoyant. The principal issue for market participants appears to be an undersupply of high end London commercial properties to add to portfolios.

Fund Finance. It is very encouraging to see funds looking to deploy capital. Capital call facilities, bridging finance and related transaction volumes have been high for the last 12 months.

IPOs. The IPO market continues to perform well despite valuation concerns and the equity capital markets group are currently advising four emerging market groups on main market and AIM debuts.

Workouts. As economic conditions have improved we have started to see more portfolio deals being done and generally a move away from enforcement scenarios.

Final Thought. Not once during all of the emerging markets presentations I made during the downturn did anyone ask me my views on the US economy. It was then, and remains, the world's largest economy and the engine room of the global trade juggernaut. As I write I see headlines noting a strong spring bounce back from the US economy with annualised growth of 4 per cent for 2014. Further growth is expected in 2015. Ignore the developed economies and particularly the US at your peril.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions