Pension fund investment through Jersey is supporting the futures of almost 60 million people around the world, according to new research published by Jersey Finance.
Undertaken by consultancy Europe Economics, the research – Jersey for Institutional Investing: A Clear Choice – looks at how Jersey supports and facilitates the management of pension funds and other institutional assets such as endowment funds and sovereign wealth funds.
The report shows that pension fund assets worth £160bn are invested through Jersey, including £39bn in fund structures and £120bn in corporate vehicles.
It also found that:
• A total of £52bn of funds under administration in Jersey is attributable to tax-exempt institutional investors, and the focus of that institutional fund business is overwhelmingly on pension funds, accounting for 79 per cent of the total
• 46 per cent (£18bn) of pension fund assets in Jersey originate from the EU (excluding the UK), including the Netherlands, France, Denmark and Germany. Another 13 per cent (£5bn) comes from the UK, less than 10 per cent (£4bn) is from North America, and 32 per cent (£12bn) from the rest of the world
• Most of the institutional investment administered in Jersey (60 per cent) is invested in private equity and venture capital, with around 19 per cent invested in real estate. Bonds, equities, mixed and money market instruments account for 7 per cent
The research consulted lawyers and administrators who service funds and corporate structures to hear how Jersey differs from onshore jurisdictions in attracting institutional investment. Jersey’s regulatory regime was deemed to deliver a ‘high level of benefit’ (62 per cent of respondents), while Jersey’s access to skilled labour was also considered highly beneficial (40 per cent).
Ross Dawkins, Principal at Europe Economics, said: “This research helps explain how tax neutrality plays a vital role in supporting institutional investment. For institutional investors who make cross-border investments into non-tax-neutral countries, creating tax-transparent vehicles can be complex and costly. Investing through a tax-neutral finance centre like Jersey avoids these complications.”
• Jersey for Institutional Investing, including key findings and full methodology, can be downloaded here