The total number of registered Jersey Private Funds (JPFs) has exceeded the 500 mark, as the structure continues to assert its appeal for flexible alternative fund structuring.
According to the Jersey Financial Services Commission's latest quarterly statistics, published by Jersey Finance, 502 JPFs were registered at the end of September 2021 – a 38% increase from the previous year.
What is the JPF?
Originally launched in 2017, the JPF is a cost-effective structure tailored towards the needs of small numbers of sophisticated investors. Offering high levels of flexibility, fast-track authorisation and lighter touch ongoing regulatory requirements, the JPF has no requirement for an audit or prospectus and provides a quick-to-market regulatory authorisation process for those structures meeting the eligibility criteria.
The nimble nature of the structure means the JPF can provide easy access to European investors through the tried and tested national private placement regimes (NPPRs), if marketing into the European Economic Area (EEA) is desired1.
JPF: A cost-effective solution
The success of the JPF stems from the fact that it caters specifically for those managers who are not targeting a broad investor base, focussing only on professional investors, and thereby allowing a lighter touch regulatory environment.
The removal of some of the usual regulatory burden results in a streamlined product that can be quick to set up, while still having the Jersey hallmark of quality.
The resultant cost efficiencies are obvious, even more so when coupled with the fact that non-EU managers raising funds in Europe can utilise NPPR's thereby minimising the regulatory impact of AIFMD.
Key benefits of a Jersey Private Fund
- Can be offered to up to 50 professional investors
- Fast-track 48 hour approval
- Can be open or closed-ended
- an be established as an Alternative Investment Fund (AIF) under Jersey's AIFMD regime to allow marketing into the EU/EEA
- No requirement to produce an offering document
- The promoter does not require prior approval from the Jersey regulator
- Can take any legal form
- Minimum investment/commitment of £250,000 per investor
- The minimum does not apply to professional investors with a net worth exceeding USD1m
- A JPF must appoint a Designated Service Provider (DSP) in Jersey - Hawksford is fully licensed to act as DSP
- The rules governing a JPF are set out in the JPF Guide which is published by the Jersey regulator
- No investment or borrowing restrictions
Why choose a Jersey Private Fund
Due to its unique qualities, a JPF is the go-to choice for a
broad spectrum of clients and their investors.
- Institutional investors and managers
- Alternatives, Private Equity and Venture Capital
- Family offices and family co-investment vehicles
- HNW investment syndicates and club deals
- New to market managers
Where a manager is appointed to act for a JPF, the regime is again highly flexible. This makes JPFs highly effective for new managers where track record is limited. Where the manager or advisor is established in Jersey, it is ordinarily able to avail of exemptions which mean that it will not be required to obtain a license or permit from the Jersey regulator.
Designated Service Provider
A JPF must appoint a DSP. Regulations require that the DSP must be licensed and physically present in Jersey. The DSP must confirm that the JPF meets the requirements contained within the JPF Guide - both on application and on an annual basis. The DSP is also responsible for completion and submission of the fund application and ensuring that all necessary due diligence and AML requirements are met.
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.