Altum expert comments on market conditions in Business Brief

Matthew Devine-Hill profile image
Matthew Devine-Hill
Associate Director, Private Equity & Venture Capital.
Published: 7th Sep 2023

Navigating challenges and prospects

Matthew Devine Hill, Associate Director at Altum Group comments on Jersey’s resilience in the evolving funds landscape as published in the September edition of Business Brief, click here to download the publication.

The Funds industry in Jersey continues to thrive despite the recent volatile macroeconomic conditions globally. Central banks persist in tighten monetary policy to curb soaring inflation, while the conflict in Ukraine endures.

The fund industry as a whole has been impacted by the prevailing environment and challenging macroeconomic conditions, leading to a substantial reduction in public market valuations globally, however, private assets have experienced a less proportional decline and have maintained robust performance throughout this period. Despite the solid performance, there has been a decline in exit activity for Fund Managers, with fewer and fewer buyers willing to invest at current prices given the high degree of uncertainty across various aspects of the global economic and geopolitical landscape.

This sluggish rate has consequently impacted the ability of Fund Managers to raise capital for new funds to launch due to the lack of liquidity in the market and therefore limiting Limited Partners available capital to deploy. This isn’t a necessarily a bad thing, it is more of a reset in the fund market (which we have seen previously post the 2007/8 financial crash) as for the past few years the industry has taken advantage of optimal conditions and has been a golden age for fund raises and deal making.

Turning to Jersey’s role within the funds industry, I believe its prospects remain as promising as ever. The jurisdiction boasts an exceptional reputation and attractive for both seasoned and first time Fund Managers. As an island and an industry, we continue to set the pace by offering a resilient and desired location for fund domiciliation. This stems from a crucial blend of political and fiscal stability, coupled with excellent service providers and a proactive regulator approach.