The Jersey Private Fund has been a very public success.
Launched three years ago, the JPF substantially simplified the Jersey offering for a funds product that resets the regulatory demands for fund managers that aren't raising money from a huge number of investors, are targeting only sophisticated investors and, in some cases, aren't publicly raising money at all.
The most recent statistics for the first three years of the JPF tell the story – at the end of 2019, there were 306 funds registered (19% growth in just 6 months).
The reaction of the market that we see, not just in London but around the world, means that there won't be any surprise when that number just keeps getting bigger – this is a product that continues to sell.
In our experience of pitching the JPF with managers and law firms in both the City and further afield over the last three years, here are four reasons it works:
- The last decade has seen a huge flow of capital from institutional to private hands – and the JPF is a product that specifically caters to that trend (this trend isn't slowing - a November 2019 Morgan Stanley report put percentage growth of private capital funds at 15% in H1 2019, compared to 2% for traditional funds).
- There's no argument anymore about financial services regulation – it's a part of life, we all understand it, and we all know why it's there. The offering from the JPF, put at its simplest, is that you don't need layers of regulation designed to protect the public when you're selling a product that by definition can't be accessed by the public (JPFs restrict offerings to 50 potential investors, all of whom must meet eligibility criteria as professional investors, or make a minimum investment of £250,000 or its currency equivalent).
- Raising money from Europe doesn't need to involve the full AIFM experience – and there are compelling reasons why it shouldn't. EU figures themselves show that 97% of all managers target three or fewer EU markets – and in most cases the National Private Placement Regimes offer full access without additional and unnecessary layers of regulation and cost.
- Because it is a Jersey offering, the JPF offers time zone adjacency for London and European markets (also for South Africa, where it has been a big success), not to mention the familiar Anglo service culture and the Jersey watermark of quality regulation and service providers.
This combination of selling points has made the JPF work, not just for Jersey's existing base of experienced fund managers, but also as an option for club deals, family offices and as part of the private wealth structuring toolkit, blurring the lines between funds and private capital. And if fund managers are looking at new opportunities with the potential to broaden the investor base further down the line, there is also the option to convert a JPF to a more publicly offered Jersey fund product, including the "Expert Fund", at a later date.
From the perspective of a Jersey funds lawyer, the JPF has made the last three years more varied, more exciting and more productive – there's no reason to see that changing in the years to come.
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