AIFMD spurs Jersey to offer fast-track fund

The offshore financial centre has created a bespoke ‘Private Placement Fund’ ahead of rules which will harmonise EU member states individual fund marketing regimes.

Jersey, a popular offshore fund domicile, has unveiled a new “Private Placement Fund” designed to offer institutional investors a fast-track approval process at the local level. 

The fund’s purpose is to allow offshore funds a suitable structure for entering EU sovereigns’ individual private placement regimes, sources explained. The Alternative Investment Fund Managers Directive, which goes into effect in 2013, will create a pan-EU marketing regime. But until 2018 offshore funds have a grace period before the continent-wide rules apply to them, allowing them to access EU institutional investors at the member-state level. 

“This is an opportunity for promoters to quickly and efficiently establish a fund with few investment restrictions, and take advantage of those national regimes,” said James Mulholland of offshore law firm Carey Olsen.  

Closed-ended funds with no more than 50 LPs can now gain approval from Jersey regulators in as little as 72 hours, according to sources. 

And while other Jersey fund vehicles can already be offered through EU member state’s private placement regimes, they “are subject to more regulation in Jersey than is needed for such regimes,” explained Edward Devenport of offshore law firm Mourant Ozannes. The Private Placement Fund, in contrast, provides a light-touch self-certification procedure for promotion, he said.