Jersey Viewed As ‘The Next Connecticut’ In Hedge Fund Circles

by Phillip Morton, Investors Offshore.com

07 September 2005

Jersey's proximity to London, the hedge fund capital of Europe, in combination with its benign tax regime and relative absence of red tape for the investment fund sector has marked the island out as the "next Connecticut", according to hedge fund operators.

“Connecticut should be the model for Jersey,” observed Ian Cadby, chief executive of Jersey-based Liberty Ermitage, Europe’s 10th largest fund of hedge funds manager with assets of US$4 billion, in an article by Hedgeweek.

“It ticks all the same boxes – its proximity to markets and research, the clean tax structure, and the improvement in quality of life over London or New York," he added.

Richard Boleat of Channel House noted that growing hostility by the UK's Inland Revenue towards 'non doms' - those resident in the UK but not domiciled there for tax purposes - is making Jersey significantly more attractive than London for hedge funds.

“There’s also a desire for those from an Anglo-Saxon or common law background to remain in a legal environment they understand and are familiar with," he observed.

In June, Jersey Finance Limited, the island's investment promotion agency, announced that three hedge fund managers with funds valued at more than $900 million had opted to move to Jersey in the first half of the year, attracted by the streamlined regulatory environment, an easing of the Government policy toward new business entrants and the quality of life provided on the Island.

According to Phil Austin, Chief Executive of Jersey Finance Limited, a recent survey of specialist fund advisers at some of the UK’s top law firms placed Jersey as the domicile of choice for private equity and property funds, and second in the world to the Cayman Islands for hedge funds.

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