Jersey Reports Fund Industry Growth

by Phillip Morton, Investors Offshore.com

07 September 2011

Jersey’s finance industry showed stable growth in the second quarter of 2011, with the value of funds administered in the island reaching its highest level for two years and the value of funds under management increasing by 4.2%.

The net asset value of funds being administered in Jersey grew for the fourth consecutive quarter to stand at GBP196.7bn (USD118.8bn), a 10.5% year-on-year increase. The figure does not include funds established under the Unregulated Funds Regime, of which there were 136 by the end of the period – an 8.8% increase on the previous quarter. The alternative asset classes also reported net asset value growth of GBP2.3bn (1.6%) to GBP145.2bn.

The statistics, collated and prepared by the Jersey Financial Services Commission, are for the three month period ending June 30, 2011. The headline figures are as follows:

• The Net Asset Value of funds under administration increased by GBP2.1bn (1.1%) from GBP194.6bn to GBP196.7bn during the second quarter of 2011. The JFSC authorised 25 new regulated funds during the second quarter of 2011, reflecting a 25% increase over the quarter.
• The total number of unregulated funds increased by 11 (8.8%) to 136 during the second quarter of 2011.
• The value of funds under investment management increased by GBP0.9bn (4.2%) compared to the previous quarter from GBP21.3bn to GBP22.2bn.
• The total number of live companies on the register increased by 118 from 32,998 to 33,116 during the second quarter of 2011.
• Banking deposits decreased by GBP1.5bn (1%) during the second quarter of 2011 from GBP166.5bn to GBP165bn.

Whilst bank deposits held in Jersey showed a slight quarterly decrease, deposits originating from the Far East and Middle East remained impressive, standing at GBP8.7bn and GBP20.4bn respectively. This continues to represent a combined total of around 18% of Jersey’s level of deposits and reflect the value of recent promotional activity in Hong Kong, Greater China and the United Arab Emirates.

Geoff Cook, Chief Executive of Jersey Finance Limited, commented:

“There continues to be very positive news for the funds sector, which saw an increase in the total net asset value of funds under administration and management. New business instructions were up 25% and, subject to markets stabilising, we expect to see improvements in new funds numbers in the coming months. The investment management sector, meanwhile, reported growth of 2% in its client base and the net asset value of funds under investment management grew by 4.2%.”

“Although the banking sector saw a slight decrease in deposits, the reduction amounted to just 1% and was driven by a decrease in deposits from other banks. In fact, if we drill down into the figures, customer deposits were up GBP1.2bn during the period, whilst weaker sterling added a further GBP0.9bn to the value of foreign currency deposits.”

“Given [that] most economies did not recover at the rate economic forecasters were predicting for the second quarter of 2011, these latest figures demonstrate a stable position with improvements in company formation numbers and investment management being sustained."

Cook identified also that company formations had increased for a third successive quarter, a good indicator, he said, of the health of an economy.

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