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Home > Insights > Jersey’s Funds Landscape

Jersey’s Funds Landscape

8th Apr 2015

Firmly established as a prominent offshore funds centre and a domicile of choice for many leading fund promoters, Jersey has much to offer emerging markets across the African continent.

Jersey’s wide range of flexible fund products, its neutral tax regime and an established framework of best practice in the governance of investment vehicles have positioned the jurisdiction at the forefront for fund clients seeking to tap into the growing number of inward and outward investment opportunities arising from the continued development of the African market.

Available data is pointing to further development of African economies in the years ahead. Across different regions of Africa, there is a growing range of funds activity with the greatest focus on private equity. A number of well-established funds invested in other parts of the world are now concentrating their efforts in Africa in relation to both infrastructure projects and to finance acquisitions. Complementing this trend is the apparent determination within the continent to open itself further to the outside world and to tap into these growing investment opportunities.

Experience

Jersey’s finance industry has wide ranging experience in supporting African clients wishing to make investments or protect their assets outside of the continent, as well as those clients looking to invest in Africa itself.

This includes managing cross border transactions and forming appropriate and efficient structures that have wide appeal to clients in Africa who are keen to expand their commercial activity in the continent’s emerging markets. For over 25 years, we have helped many
clients structure their investments into a broad range of sectors including residential and commercial real estate, hospitality, manufacturing, mining, infrastructure, transport and retail.

Political stability, high quality regulation, the professionalism of the workforce and the length of time that Jersey has enacted the appropriate legislation to form, create and administer funds, all contribute to its appeal as a location for sophisticated investors and managers structuring their investment fund. The well -trodden path of being able to list Jersey companies both on the main UK exchanges and the Toronto Stock Exchange, a popular choice for mining companies, has also been beneficial.

Meanwhile, a further advantage for Jersey-based practitioners is the commitment of bodies such as Jersey Finance and Locate Jersey, the inward investment arm of Jersey’s government, who continue to ramp up their presence across the continent to raise awareness in the key markets.

Recent business

Jersey’s reach extends widely across Africa and we can highlight examples of supporting funds business in
South Africa, Tanzania and Mozambique, with significant corporate or private client work also undertaken with long standing clients in Kenya, Nigeria, South Africa, Ghana and Egypt. Among more recent examples in the funds space has been:

  • the structuring of a private fund for a group of 12 investors who wished to invest into UK residential property
  • acting for a number of private equity funds invested in infrastructure projects in Sub Saharan Africa
  • acting for a listed diamond mining company over a ten year period

The underlying investments will often be structured in other locations for reasons of double taxation agreements, especially Mauritius, where JTC has a presence, but the main fund, whether listed or private, is in our experience more likely to be located in a premier jurisdiction such as Jersey.

Global standards

As African countries seek investment from abroad, they are keen to have in place the appropriate global standards of corporate governance and therefore investors are drawn to Jersey, where fund and fiduciary professionals are themselves regulated, where there is broad familiarity with the structures and the funds regime, and where corporate governance skills are of a high order.

Prominent emerging markets such as Africa will continue to provide new investment opportunities, resulting from elevated economic growth rates, higher expected returns and diversification benefits. As economic activity escalates, it will undoubtedly attract further private equity funding and Jersey’s fund administration and fiduciary specialists have an important and influential role to play in that growth.

 

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