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Jersey private placements continue to grow as alternative AIFMD passport

More non-EU alternative investment fund managers are choosing Jersey private placements rather than access EU investors via AIFMD passports.

Recent data from the Jersey Financial Services Commission shows that there are now 201 Jersey-registered alternative managers marketing 374 funds into the EU through private placement – a 2 percent increase since June 2021, and a 58 percent jump since December 2016.

The alternative investment funds (AIFs) include private equity, venture capital, real estate and infrastructure.

This represents a 9 percent rise in new funds over the previous six months, and 47 percent over the past five years.

Elliot Refson, head of funds for Jersey Finance, said the growth in recent years has been driven by Brexit, as non-EU managers, including UK managers, have looked at other jurisdictions to support their EU fundraising activity.

Elliot Refson

Refson said another reason for the growth is that US managers are now aware of the advantages of private placement.

“For managers who don’t need blanket EU coverage and therefore don’t need a full onshore EU presence – and EU figures indicate that’s around 97 percent of managers – private placement remains an attractive option. This is reflected in the steady increase we have seen over a number of years now,” Refson explained.

For non-EU fund managers looking to market to European investors, access to these investors via NPPRs, albeit limited, is faster and easier to obtain than a full AIFMD passport.

According to the latest figures provided by Jersey Finance, the country currently administers more than £450 billion ($586 billion) of fund assets, as of December 2021, a 19 percent increase over the previous year. The total net asset value of regulated funds administered in Jersey rose by almost a fifth over the course of 2021 to reach a new record level.

Alternative asset funds, including private equity, real estate, hedge, credit and infrastructure, led the growth and represent 89 percent of total funds business. Private equity and venture capital fund business grew by 27 percent over 2021.