Next trends in next-gen
The roundtable discussion moved on to ‘next-gen’ investors and how their approach to investing, either inherited wealth or their own earnings, is driving the shift to sustainable finance.
“[Next-gen investors] are not just about [generating] ultimate returns by whatever means. There’s a cultural shift in attitudes among those new investors and the way they’re approaching investing. They want to help others and make a difference,” Satchell said.
“We, in Jersey, are only going to embrace that. We were always very strong in the private wealth-type administration in the past and that, coupled with a growing fund industry, means we’re likely to see the next-gen investors using fund-type structures in a more ‘private wealth’ way, and the JPF regime lends itself very well to that. These investors will increasingly be looking at making ESG-type investments – more so than their parents or their grandparents ever used to. Jersey is in a great place to accommodate that, and this should be marketed and discussed to a greater extent.”
Sanne’s head of private equity, Ashley Vardon, agreed that ESG now has everyone’s attention. “When we talk to managers, they’re not only looking at it from the perspective of their underlying investments, but from their own business perspective. Sanne and other firms [like us] have appointed dedicated ESG professionals in-house and have invested in ESG platforms that can assist managers with advice, meeting any reporting requirements and helping them consult with their investors.
“Lawyers we’ve spoken to are reporting that in certain relevant fund structures, they are seeing part of the manager’s performance fees being based on how well the assets have performed from an ESG-credential basis. We’re very much seeing the next-gen investors driving this.”
Satchell raised another point around the emergence of next-gen investors and family offices in particular. “What we’re seeing is that family offices were managing their own money in their own way. [But] transitioning to raising funds requires far more input from service providers like administrators and lawyers. Going back to the very start [of the discussion] here, talking about digital transformation, because of how important the digital and technical aspects of launching, raising and administering funds are, we see a greater reliance on outsourcing, which allows access to high-end technology without the need to invest in in-house software and systems/processes. Jersey is well placed to assist here with a very experienced workforce, flexible regulator and technology at the forefront.
“This makes it all the more important that the big service providers are investing themselves in those technology products to allow the next gen to focus on making investment decisions, rather than spending their time on reporting, administration, accounting etc. Those tasks were much less of a consideration when managing family money, but [they must be a consideration] when becoming more institutional and managing third-party money.”
So, what is Jersey doing to support those trends in the future? Refson said that among the mainstream financial intermediaries in London, Jersey’s proposition – its stability, its product offering – is very well known.
“Jersey Finance has been trying to take the message of Jersey to a broader base in London, including investors from family offices, which is a new market for us. It also includes placement agents because they determine domiciliation. Our message is the same for each of these areas, but what we’re doing more of [today] is pitching directly to these areas, to the family offices as we’ve just been discussing,” explained Refson.