Jersey Finance, which is a body that represents and promotes Jersey internationally, commissioned an independent report to illustrate Jersey’s important role in the effective management of pension funds and other institutional assets.
The release of the report is not in response to the recent media attention to the Paradise Papers however, the timing is right as the report shows Jersey’s importance in serving tax-exempt institutional investors and the benefits this ultimately has for these institutions and their investors around the world.
We highly recommend reading the full report which can be accessed here: Jersey for institutional investing however, we have summarised the key findings and messages in the text below.
What?
An independent leading economic research company was commissioned to produce a report on Jersey’s role in facilitating the effective and efficient management of pension and other institutional assets. The report is intended to provide findings that will help Jersey to assess its current offering with the view to informing its future strategy in terms of serving its existing and potential clients worldwide.
Who?
Jersey Finance in early 2017 engaged Europe Economics, a leading international research consultancy firm based in the UK, to produce the report.
How?
Europe Economics used three main data strands for their research:
- Data analysis – they analysed data on funds administered in Jersey from the Jersey Financial Services Commission and from Monterey Insight;
- Literature review – they included insights on the acknowledged benefits of tax neutral international financial centres, regulatory impacts and tax implications; and
- Fieldwork – they surveyed and conducted interviews with Jersey administrators, fund managers and lawyers who together account for around 58% of the total funds under administration in Jersey.
Key messages
The report shows that the tax-exempt institutional investors account for around a fifth of the funds under administration in Jersey and a similar proportion of the investment in corporate structures.
The report also concludes that there are two key attractions which lead tax-exempt institutions to invest in Jersey and these are:
Tax neutrality
- The report provides further information on the main benefits of Jersey’s tax neutrality for tax-exempt institutional investors; and
Excellence
- It is the Jersey’s attribute as a forward-thinking jurisdiction coupled with a proportionate regulatory environment that is the second most important aspect of Jersey’s attraction.
However, the report also outlines other important advantages that include:
- Clear, open and honest approach to business;
- Specialist expertise;
- Concentration of skills; and
- Flexible arrangements for marketing alternative investment funds in the EU.
How can we help?
The report mentions Jersey’s particular strength in the private equity and real estate (PERE) investments segment where processes are less amendable to automation and more dependent on the skills and expertise of the people involved.
- We believe that this conclusion is correct in that our institutional clients can rely on our breadth and depth of expertise in managing all aspects of PERE structures throughout their life cycle.
- Our teams have extensive experience in administering the typical legal vehicles that are used for structuring of PERE investments, such as limited partnerships, unit trusts, companies etc.
- Our institutional clients benefit from our detailed understanding of the local regulatory regime and our ability to manage any compliance risks of the structures that we administer.
- Our teams of experienced accountants provide detailed management reporting, including NAV calculations, and our systems are compatible with a number of platforms used by GPs and LPs so that data can be uploaded seamlessly and safely.
- Our directors bring high quality levels of corporate governance oversight for conducting board meetings as well as relevant industry knowledge. In addition, we are able to source non-executive directors to ensure continuous effectiveness of the board.
By Mirek Gruna, Managing Director.
If you would like to discuss this article, please contact Mirek Gruna, Managing Director.