Addressing nearly 500 members and guests at the association’s annual dinner, Mr Byrne said that Jersey’s focus on alternative investments had been key to its popularity and that continuing innovation would be needed for future success.
The Island provided ‘the very best ecosystem for a funds industry’, he said, and at the end of 2017 total net asset value of funds under administration was more than £291 bn, up 15% year on year.
‘However, those figures are only part of the story – they don’t take into account the Jersey Private Fund and we know that over the 13 months since the JPF was introduced, 121 have been launched,’ Mr Byrne said.
‘I’m optimistic that if we were to include JPF data, that would push us clearly through the £300 bn mark.
‘We’re also seeing a growing community of managers who are fully resident in the Island, across private equity, hedge funds, debt, real estate and crypto. These managers are bringing a real depth and diversity to our industry, at a time when questions around substance are never far from the agenda. Vitally, they are also providing some excellent opportunities for further diversity in career choice for our school leavers and graduates.’
Mr Byrne said that allocation to alternatives continued to increase, from pensions, sovereign wealth funds and institutional investors, with Jersey seeing ever-increasing allocations to private equity, private debt, real estate and infrastructure.
However, there were significant challenges, with Brexit continuing to be one area of uncertainty, although it had not had the impact on the funds industry that might have been feared. In fact, since Brexit some of the largest funds ever had been raised in Jersey, including the biggest, Softbank’s Vision Fund, as well as other very large funds such as CVC Fund 7 and Nordic 9.
‘A key question around Brexit has been how we bring to life the Jersey proposition for both EU and non-EU investors,’ he said. ‘It is vital that we continue to develop clear and compelling messages, in particular in relation to the opportunity afforded by our private placement regime. There are now close to 150 alternative fund managers going to market through private placement in Jersey, with almost 300 funds distributed into Europe through these channels, a 15% year-on-year increase.’
However, looking to the future, Mr Byrne emphasised the importance of product innovation for continuing success, and he looked forward to welcoming the Limited Liability Company and Jersey Registered Alternative Investment Fund onto the statute books.
That would help the industry maintain the momentum seen with JPF and LLP vehicles, he said.