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Jersey Releases Q3 Report On Finance Industry

by Jason Gorringe, Tax-News.com, London

21 December 2009


The level of specialist funds business in Jersey has shown an increase during Q3 2009, although overall funds business has decreased. Banking deposits remained relatively stable compared with recent quarterly reports.

Bank deposits decreased by only 2% during the third quarter, from GBP174.6bn to GBP170.6bn. The net asset value of funds under administration is down from GBP198bn in the second quarter to GBP163bn in the third quarter, although most of this decrease is pinpointed to one fund promoter firm, which has restructured some of its business.

Specialist funds, including private equity and venture capital, hedge and real estate, have shown increases over the quarter ranging from 9% to 12.9% over the figures for the previous quarter, even though the overall value of funds under administration has declined.

The statistics collated and prepared by the Jersey Financial Services Commission for the period ending September 30, 2009, also show that while the number of funds created was down by 2.6%, company formations were up 17% and the value of funds under investment management increased by 7.4% during the same period.

Company formations were up 17% compared to Q2 2009. The total number of live companies on the register decreased by 624 during the last quarter from 33,811 to 33,187.

Geoff Cook, Chief Executive of Jersey Finance, said: “As anticipated, banking deposits have remained relatively stable during the third quarter of 2009, once again demonstrating the attractiveness of Jersey as a banking center in uncertain times. Whilst the reduction in the headline figure for funds is disappointing from a marketing perspective, there is minimal impact from this change in economic terms. The reduction in the figures is directly attributable to a large promoter taking the decision to restructure certain functions carried out in relation to its funds. As a result, certain functions that were previously being performed for the promoter’s non-Jersey funds have been transferred out of Jersey. This is not reflective of Jersey’s strong fund offering and has no effect on levels of employment nor on the profitability of our funds business. Without this one-off adjustment, the overall fund performance would have been marginally positive, with increasing numbers of new fund enquiries being received and specialist funds business showing an increase.”

“Overall, despite a difficult and challenging climate this year, Jersey has enhanced its reputation as a leading international finance center with ringing endorsements for the quality of its financial services from bodies such as the IMF, STEP, the Global Financial Centres Index and OECD. These results do however highlight the need for Jersey to continue to market itself vigorously in a very challenging and competitive market place.”

A comprehensive report in our Intelligence Report series, analysing the situation on the ground in each of the main offshore banking centres, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report3.asp

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