Private Equity and Property Funds

Start up Private Equity and Property Funds in Jersey

This brief is designed primarily for “emerging” Private Equity and Property fund managers for whom starting an investment fund means, in effect, starting a whole new business, including setting up a management company. Managers have to make the transition from running a portfolio, probably in a large institution, with a corresponding infrastructure, to running a business. New managers will need to build up their own infrastructure.

The brief also provides guidance for established alternative fund promoters/sponsors, particularly in relation to issues such as domicile, structuring, stock exchange listing and marketing. The management company set-up section is tailored specifically for UK-based managers; otherwise the brief will be of interest to any manager setting up an offshore alternative investment fund.

The following points should be borne in mind:

• The process is likely to take longer than would be expected – be prepared to spend at least six months, full time, on the set-up
• Timing will, to a large extent, be dependent on other parties, such as regulators, professional advisers and service providers
• The manager is unlikely to start earning revenue within six months of the beginning of the project
• The manager will need a good cash cushion to see it through the set-up phase
• High quality administrative support will make life much easier
• Tax issues should be addressed early on rather than when they are pressing
• The manager should have initial discussions at an early stage with the regulator(s) and fund administrators
• The manager needs to consider the implications of failure to raise sufficient initial funds, bearing in mind advisory fees, and other commitments, such as office lease, equipment etc
• The manager needs to budget for the expenditure required before subscription monies/management fees are received

The process can be divided into the following steps:-

1 Starting the business
2 Management company set up
3 Fund set-up, including regulatory approval
4 Stock Exchange Listing
5 Marketing and Distribution

There may be some overlap between these steps but these are the principal areas that need to be covered. It may make sense to do some pre-marketing at an early stage to test the waters as to investor demand and, also, to get an initial indication of the requirements of potential investors on issues such as fund domicile, structure and stock exchange listing.

How can IFG help?

IFG has a unique fund services offering for those promoters seeking a boutique and bespoke approach to funds services business.

Our open architecture enables us to devise the most appropriate structure and service that will meet each client’s particular objectives.

We are regulated by the JFSC to undertake Fund Services and Trust Company business. In essence our offering includes:

Fund Services

• Fund Manager
• Administrator
• Registrar
• Distributor
• Subscription Agent
• Redemption Agent
• Manager of a managed entity

Corporate Governance

• Non executive director services, for:
• Fund vehicles
• Fund Investment Manager
• SPVs
• Corporate Secretarial Services
• Company administration
• Provision of compliance officer
• Provision of money laundering reporting officer

Remuneration Services

• Employment companies
• Employee Benefit Trusts
• Share Plans
• Pensions
• Payroll administration
• HR Services

Jersey Relocation Services

• Local tax
• Regulation of Undertakings application
• Social Security
• Property Finder
• Assistance with 1(1) J and 1 (1) K housing applications
• Serviced accommodation for temporary assignments
• Serviced office facilities

Accounting Services

• Bookkeeping
• Management reporting
• Annual Financial Statements
• Liaising with auditors

Channel Islands Stock Exchange

• Listing services
• Continuing obligations

IFG does not provide taxation or legal advice. The information and expression of opinion expressed in this briefing note are not intended to be a comprehensive study or to provide taxation or legal advice. Specific advice concerning individual situations should be taken and IFG can provide introductions to advisers who specialise in this area.