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Jersey fund industry proving its resilience, says Lipper

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Jersey’s fund servicing industry amounted to assets of USD270.3bn (GBP135.8bn) in 1,605 funds and sub-funds at the end of June, up more than 160 per cent from USD102.3bn (GBP57.3bn) five y

Jersey’s fund servicing industry amounted to assets of USD270.3bn (GBP135.8bn) in 1,605 funds and sub-funds at the end of June, up more than 160 per cent from USD102.3bn (GBP57.3bn) five years earlier, according to the 14th edition of Lipper’s Jersey Fund Encyclopaedia.

‘The attraction of alternative asset classes has helped the island’s fund servicing industry post impressive growth over the past year, despite tougher market conditions,’ says Ed Moisson, Lipper’s director of fiduciary operations.

According to the fund encyclopaedia, first published by Fitzrovia International (acquired by Lipper four years ago) in the early 1990s, the largest asset class among funds domiciled on the island is real estate, with total net assets of USD64.0bn, 35 per cent of total domiciled fund assets, followed by private equity and venture capital funds with USD41.4bn.

‘The Channel Islands have continued to deliver exceptional growth within the funds industry again throughout 2008,’ says Michael Le Garignon, head of sales and business development for offshore markets at BNP Paribas Securities Services. ‘Both Jersey and Guernsey have established themselves as international centres for funds business.

‘The operational capacity of administrators and how they support risk measurement services will be critical in future decision making when reviewing domiciles from which to launch new funds.

‘While it is plausible the islands will continue to establish a first-class reputation for alternative fund administration services globally, the short-term fundamental driver for both islands will be their ability to maintain delivery of the highest services in relation to all fund types and to support investors in their quest for greater awareness of risk. With a developing infrastructure and committed sector supported by significant expertise, both islands provide attractive locations from which fund managers seek to do business.’

The administration of funds in Jersey is dominated by Mourant International Finance Administration with USD86.1bn in assets, followed by Bedell Trust Company with USD25.6bn, R&H Fund Services (USD16.2bn), Aztec Group (USD15.4bn) and UBS (USD14.5bn).

BNP Paribas remains the largest custodian in terms of assets under custody in Jersey with USD36.5bn, followed by State Street (USD13.1bn), UBS (USD12.1bn), Standard Bank (USD11.5bn) and Deutsche Bank International (USD9.3bn).

Among professional services firms, PricewaterhouseCoopers is the largest auditor with 741 funds, ahead of KPMG with 293, Ernst & Young with 264 and Deloitte & Touche with 111. ‘The figures demonstrate the robustness of the Jersey fund industry in what are very challenging times for the global economy,’ says Larry Catterson, chairman of KPMG in the Channel Islands.

‘At KPMG we continue to make significant investment in our funds team, and we are now seeing the benefit, having almost doubled the number of funds we audit and becoming the fastest-growing auditor of funds in Jersey.’

Mourant du Feu & Jeune provides legal advice to 1,158 funds, ahead of Ogier with 557, Carey Olsen with 399 and Bedell Cristin with 398. ‘Mourant du Feu & Jeune is delighted to be recognised as the number one legal adviser to funds in Jersey for the ninth consecutive year,’ says partner and head of funds Ben Robins.

‘The ranking reflects the unrivalled level of technical excellence and strength in depth of our funds practice area, whilst the sheer number of Jersey funds we advise is testament to the growing diversity of the island’s fund industry.

‘Jersey now has a full spectrum of fund regulation suitable for any fund type – exacting regulatory regimes for retail funds and streamlined ones for alternative funds, and now an unregulated environment for sophisticated investor and exchange-traded funds.’

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