Jersey Private Funds 'maintain appeal' as bank deposits climb year-on-year

Jersey’s banking sector performed strongly in 2023 while fund structuring remained resilient against a challenging high interest rate environment, according to the latest statistics for the island’s financial services industry.

According to the most recent quarterly figures to be collated by the Jersey Financial Services Commission (JFSC) for the period ending 31 December 2023, the total value of deposits held in Jersey banks increased year-on-year to stand at £156.4bn, a rise of 5.4% and the highest year-end figure recorded since 2011. 62% of those deposits are held in foreign currencies.

In addition, within Jersey’s funds sector a total of 692 Jersey Private Funds (JPF) – Jersey’s regime for sophisticated investors - have now been established, an increase of 8.5% over the previous 12 months. This has been accompanied by consistent levels of fund structuring across the funds sector as a whole, with 1,910 separate fund pools recorded in the jurisdiction at the end of 2023 – a similar number to 2022.

Meanwhile, reflecting the challenging market conditions and in line with trends across the global cross-border funds space in 2023, the Net Asset Value (NAV) of regulated funds under administration in Jersey decreased by 7.5% compared to 31 December 2022 to stand at £452.3bn. Over a five-year period, however, the trend remains highly positive, with the total NAV of Jersey funds increasing by more than 40%.

Across the alternative asset classes – which now make up 88% of total funds business in Jersey – real estate bore the brunt of the challenging market conditions in 2023, with total NAV falling 17.3%. In contrast, however, private equity and venture capital rose by 10% annually.

Corporate activity also remained positive with a total of 35,379 companies on Jersey’s register at the end of the year, up by 1% year-on-year to stand at an all-time high.

In addition, 70 Jersey company vehicles are now listed on global exchanges around the world, including the London, New York and Hong Kong Stock Exchanges, with a combined total market capitalisation of £165bn.

Jersey Finance CEO, Joe Moynihan (pictured), said: “Against the backdrop of a persistent high interest rate environment, there is plenty to be positive about in the latest year-end figures for our industry. Asset values have been impacted across the board by the challenging market conditions with the industry as a whole seeing deal flow slow down considerably in 2023, particularly in the real estate space, and it is not surprising to see that reflected in our own figures.

“The fact that we have seen such a strong performance in our private equity sector and sustained transactional activity through fund structuring and the ongoing appeal of our JPF regime is extremely encouraging. This can give us confidence that the long-term upward trend we have seen over the past five years can be maintained.

“It’s also pleasing to see our banking sector continue to play such a positive role at the heart of our industry with deposits rising strongly, while the fact that corporate activity is thriving is a good indicator that, in uncertain times, investors, families and businesses continue to look to the stable environment Jersey provides for their cross-border structuring solutions.”