News and Insights
25 June 2020
A versatile fund product with light-touch regulation which meets international standards.
In 2017 Jersey introduced the Jersey Private Fund and published the Jersey Private Fund Guide. This Jersey product offers investors one simple private fund offering. The product has been hugely popular with clients and it is simple and cost effective to establish and launch.
The Jersey Private Fund Guide provides for a 48 hours streamlined authorisation process from the Jersey Financial Services Commission (the “JFSC”). Once approved, the JFSC will issue a consent issued under the Control of Borrowing (Jersey) Order 1958.
What is a Jersey Private Fund?
It is a private investment fund which pools capital from more than one investor for the fund and operates on the basis of ‘risk spreading’. ‘Risk spreading’ is not defined in the Jersey Private Fund Guide but generally it is held to be the investment into one more than one type of asset. Holding companies, joint ventures, carry vehicles and family offices are expressly excluded from counting as Jersey Private Funds.
Jersey Private Funds – A quick glance
A maximum of 50 offers that are capable of acceptance may be made to invest into a Jersey Private Fund. A Jersey Private Fund may have up to a maximum of 50 investors.
The Jersey Private Fund may be open-ended or close-ended.
No offer document or prospectus is strictly necessary for a Jersey Private Fund.
Jersey Private Funds may not be listed.
Jersey Private Funds may be launched via a wide variety of vehicles including companies, unit trusts and limited partnerships.
A Jersey Private Fund may be an alternative investment fund (“AIF”), in which case Jersey’s Alternative Investment Fund Managers Directive legislation and code of practice for AIFs and AIF services business will apply.
An entity regulated as a Jersey Private Fund by the JFSC may be established in Jersey or overseas.
Jersey Private Funds are not required to comply with the JFSC’s Code of Practice for Certified Funds.
Personal questionnaires are not required from the personnel of the Jersey Private Fund.
The promoter of the Jersey Private Fund does not need prior approval of the JFSC.
The Jersey Private Fund must appoint a Jersey regulated Designated Service Provider (“DSP”). The DSP helps the JFSC to ensure compliance by the Jersey Private Fund with the Proceeds of Crime (Jersey) Law 1999 and the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008. The DSP must complete and file an application form for authorisation of the Jersey Private Fund.
Jersey Private Fund offer documents must contain investment warnings and a disclosure statement prescribed in the Jersey Private Fund Guide.
There is no obligation to appoint an auditor to a Jersey Private Fund.
Jersey Private Fund - Investors
Investors must be "professional investors" (as defined the Jersey Private Fund Guide); or be "eligible investors". Investors must acknowledge in writing their receipt and acceptance of a stipulated investment warning and disclosure statement.
In practice that means that the investors must invest a minimum initial investment or commitment of not less than £250,000 (or other currency equivalent); or be the holder of non-participating founder/ management shares or interests, an involuntary transferee of an interest in the Jersey Private Fund (e.g. a personal representative or trustee in bankruptcy of a registered holder) or is a carry vehicle; or is a discretionary investment manager investing on behalf of its clients, for whom, it is satisfied, can bear the economic consequences of the investment.
Retail investors are not permitted to invest in a Jersey Private Fund.
Post fund launch
Any material changes to the information provided by the DSP in the Jersey Private Fund Form prior to launch of the Jersey Private Fund, which would impact the accuracy of the information provided in the Jersey Private Fund Form, must be notified to the JFSC as soon as possible.
Material changes to the Jersey Private Fund occurring following the launch must be notified to the JFSC as soon as reasonably practicable and within 28 days.
The DSP is required to submit each year an annual compliance return in respect of the Jersey Private Fund.
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