Jersey Private Funds

• Published date: 02 December 2022
• Subject Matter: Finance and Banking, Financial Services, Fund Management/ REITs
• Law Firm: Ogier
• Author: Ms Emily Haithwaite, Niamh Lalor, Sophie Reguengo, Joanna Christensen, Matt McManus and Alexandra O'Grady

With the publication of the Jersey Private Funds Guide in April 2017, Jersey introduced a welcome simplification of its funds regime, by providing for a single Jersey private fund product, called the "Jersey Private Fund".

The total number of registered Jersey Private Funds has now surpassed the 500 mark, highlighting their continuing appeal to investors and managers as a flexible alternative fund structuring product.

Every Jersey Private Fund (JPF) must have a consent issued under the Control of Borrowing (Jersey) Order 1958 (COBO) and, subject to meeting the eligibility and structuring requirements of the Jersey Private Funds Guide (JPF Guide) set out in this briefing note, may be established using a streamlined authorisation approach.

A key feature of the JPF is the requirement for the JPF to appoint a Jersey-based regulated "Designated Service Provider", which assumes responsibility for a number of key functions, and which facilitates the streamlined authorisation process.

Scope of JPF Guide

A JPF is a private investment fund involving the pooling of capital raised for the fund and which operates on the principle of risk spreading. In order to fall within the scope of the JPF Guide, therefore, there would need to be both (1) at least two investors pooling their capital and (2) a number of assets being acquired, such that there would be "risk spreading".

Importantly, however, the following are expressly stated as not being intended to fall within the definition of a JPF:

1. holding companies
2. joint ventures
3. securitisation vehicles
4. family office vehicles
5. carry/incentivisation vehicles

Eligibility criteria

In order to satisfy the requirements of the JPF Guide, the following marketing considerations and investor requirements will need to be met.

Marketing considerations

1. offers to invest in the JPF may not exceed 50 - for these purposes an "offer" means an "offer that is capable of acceptance" by an investor and so pre-marketing materials sent to prospective investors will not constitute an offer for these purposes
2. where a JPF is marketed to investors in the European Union or European Economic Area and is an "Alternative Investment Fund" (AIF) for the purposes of Regulation 3 of the Alternative Investment Funds (Jersey) Regulations 2012 (AIF Regulations), Jersey's AIFMD legislation and Code of Practice for AIFs and AIF Services Businesses will apply
3. there is no requirement for a JPF to have an offer document (although it can do so, in which case, that document must contain all material information required by investors and their professional advisers for the purposes of making an investment in the JPF)
4. the offering materials of the JPF must contain the investment warning and disclosure statement prescribed for within the JPF Guide

Target investors

1. the number of investors shall not exceed 50, with each investor being either "a professional investor" (as defined in the JPF Guide) or an "eligible investor" (fitting one of the descriptions below). In either case, such investors need to acknowledge in writing their receipt and acceptance of a stipulated investment warning and disclosure...