Jersey has seen a rise in high value real estate and private equity funds targeting UK, continental European and global assets structured through the island.
In the last six months, a number of major real estate and private equity fund structures have been reported by Jersey law firms, involving a combination of European and non-European assets and investors, including:
• Appleby advised on two major landmark UK property transactions with a combined value of GBP2.5bn. The firm’s Jersey office acted on behalf of Blackstone on the sale of its interest in a joint venture with British Land, which owns the Broadgate Estate, to Singaporean sovereign wealth fund GIC, making it one of the largest real estate transactions in UK history. Appleby also advised Blackstone on the sale of its beneficial interest in the Chiswick Park Estate to the China Investment Corporation (CIC), and continues to undertake the administration of these structures.
• Carey Olsen advised Nordic private equity firm FSN Capital Partners on its latest fund FSN Capital IV, which closed with GBP500m (EUR600m) of commitments, primarily focused on mid-market Nordic companies. Thirty five per cent of the total capital raised for the fund came from limited partnerships in Nordic countries, 30 per cent from Europe excluding the Nordic region, 21 per cent from North America and 14 per cent from Asia.
• Mourant Ozannes advised on the Jersey legal aspects of the establishment and first closing of Northzone VII, a venture capital fund investing in early-stage and expansion-phase European technology companies with Nordic roots. The fund was structured as a Jersey limited partnership and authorised by the Jersey Financial Services Commission to be marketed within the EEA by private placement in accordance with AIFMD, and is targeting to raise up to GBP200m (EUR250m) through Nordic and international institutional investors.
Jersey’s role as a centre for both EU and non-EU real estate and private equity fund structuring will be one of the topics to come under the spotlight at Jersey Finance’s annual Funds Conference in London this year. The conference on 19 March will include a panel session discussing the increasing appeal of Jersey private investment vehicles and why sophisticated investors are making more use of Jersey structures for global real estate, private equity and infrastructure investments.
Geoff Cook, chief executive of Jersey Finance, says: “As the end of the transitional period for AIFMD implementation draws near, it is extremely encouraging that we are seeing not just sustained use of Jersey structures across real estate and private equity asset classes, but that the funds being structured through Jersey are amongst some of the most ground-breaking transactions completed in recent times.
“These recent examples involve both European assets and non-European investors, which reflects Jersey’s flexibility and provides evidence that Jersey’s approach to the AIFMD - in being the first third country to offer the option of a fully-compliant AFIMD regime, whilst at the same time offering a regime for non-EU funds that falls outside the scope of the AIFMD - is proving very attractive to UK, EU and non-EU managers. In fact, recent feedback we have received from UK private equity and real estate legal advisors indicates that they would be very or extremely likely to use Jersey for offshore fund structuring.
“These are not isolated cases, but build on examples we saw last year too and we fully expect this trend to continue. Jersey is the leading real estate fund domicile in Europe and with the UK Treasury confirming its national private placement regime will definitely be in place until 2018, Jersey will continue to enjoy easy access to the UK investor market. Equally, we anticipate an increase in the number of Jersey real estate and private equity funds targeting assets in growth markets in Europe, Russia, Africa and Asia this year.”
Jersey Finance’s annual Funds Conference, ‘Through the Looking Glass’, will also feature Gillian Tett as the keynote speaker and a further panel session looking at how the AIFMD is affecting fund structuring decision-making, the relationship between onshore and offshore fund domiciles and Jersey’s substance and approach to the AIFMD. It takes place on 19 March 2014 at 8 Northumberland Avenue, London, starting at 12.30pm and finishing at 5pm, with a drinks reception afterwards.