corporate and individual trust and asset vehicle business would be conducted outside the United Kingdom – with the majority of the business going to other non-sterling offshore financial centres.
Jersey is a centre for the administration and, to a lesser extent, management of investment funds. The island’s tax neutrality attracts fund promoters who can establish vehicles there that can pool contributions from investors in different countries without them risking being taxed twice, and then accumulate returns from global assets and distribute them back to investors across borders with the same confidence. In addition, the jurisdiction has focussed energy on creating a robust regulatory and legal environment for funds, which not only provides comfort to investors but is also more finely attuned to the needs of specific types of promoter. Jersey offers a full spectrum of fund regulation, from highly regulated so-called ‘recognized’ funds which may be offered widely to the general public through to un-marketed expert funds which may opt out of regulation if they fulfil stringent criteria. There is also a wide choice of legal vehicle in which funds can operate; they may be established as unit trusts, limited partnerships, separate limited partnerships, incorporated limited partnerships, companies, protected cell companies or incorporated cell companies. In most cases, funds may be open ended or of finite term. According to official statistics, the island’s fund industry employed 460 people in 2011, turned over £170 million and generated £80 million of added value.33 There are reliable data published on the scale, nature and geographical spread of funds administered or managed in Jersey. Jersey Financial Services Commission publishes data on the net asset value of funds regulated in the jurisdiction regardless of whether they are domiciled there; but it does not provide information on either asset or investor locations, nor does it report on unregulated business.34 The Lipper Fund Encyclopaedia provides detailed fundby-fund information on domicile, asset class and asset location by broad area – but offers no insight into the investors.35 The International Monetary Fund conducts and publishes the Coordinated Portfolio Investment Survey, which 33
34 35
Source: States of Jersey’s Financial Institutions Survey 2011. The official data relate to fund and some other wealth ‘management’, but not fund ‘administration’ (which is included with trust and corporate business). We have made some crude adjustments to the official data, and believe that a redefined ‘fund administration and management’ sub-sector was worth more like 1,100 jobs, £290 million turnover and £170 million of gross value added in 2011. (See Figure 46.) Source: Jersey Financial Services Commission. Source: The Lipper Fund Encyclopaedia. 47