Funds Europe – Looking forward to 2022-23, how do you see business changing in Jersey and where do you see growth?
Coughlan – I see a continued increase in restructuring and refinancing, as managers reassess exit plans and attempt to react to the unprecedented challenges they have faced recently. ESG will be key, and that is a real area of potential for us. With it comes additional reporting and complexities, all of which could yield further outsourcing. Continued outsourcing by managers is almost inevitable given the ever-increasing volumes and reporting obligations on managers.
Macleod – Looking to 2022/23, an opportunity for Jersey is in the family office space and how this interacts with alternative funds. A white paper IQ-EQ recently produced looks at the ‘great wealth transfer’ over the next ten years in ultra-high-net-worth family offices. In the US$100 million-plus bracket, we estimate there’ll be a $7 trillion movement of cash from generation to generation. We also anticipate that the generation inheriting the wealth will be much more interested in alternatives than the previous generation. We are already seeing this driven by negative interest rates on fixed income and cash returns. This plays into Jersey’s hands as a leading jurisdiction for the servicing of alternative funds and family offices.
Burgess – Over the coming year, there’s going to be a huge capital requirement for businesses that have great prospects but don’t have capital to invest. Investment managers are good at separating the wheat from the chaff to identify opportunities for long-term returns.
Look at the growth of the private debt fund market. There’s a huge amount of lending that is secured on assets that are currently or about to be in distress; some of those private lenders may not be set up to handle a lot of distress, so that creates opportunity for sophisticated managers with new capital. There’s going to be musical chairs, and that involves activity that people in Jersey are good at.
Before March, we were all talking about the amount of capital ready to be invested into the type of assets we specialise in. That capital is still there, and the distress we’re going to see over the next six to 12 months will create new opportunities for it to find a home.
If you’re a vanilla organisation, you’re not wired to think about the problem-solving that goes into a distress situation. Jersey is a standout at having the intellect to handle those complicated matters.
Refson – It is the role of Jersey Finance to take a more macro approach. Over the past year, we’ve been working to diversify our global funds footprint by both asset class and geography. In terms of geography, we’ve harnessed the network of our local representation around the globe, which until now has predominantly been private client-focused, in order to take our funds message into new markets, specifically the United States, Asia, the Middle East and Africa. We will continue to expand our global footprint while at the same time doubling down our messaging in our key European markets.
Our ease of doing business, stability, and respected regulatory environment should help Jersey stand out in a world where many other international finance centres are facing increasing challenges. As the alternatives sector continues to grow, we’re well placed to capitalise on that growth.
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