GlenQ explores the opportunity presented by Jersey Private Funds
In a game-changing moment of clarity, Elon Musk understood what he had to do. The South African-born entrepreneur was reportedly on a flight from Russia when the realisation came. He should build his own rocket.
Musk possesses a long-held dream of sending humans to Mars. More than a dream, actually, he plans to colonise the Red Planet. But he needed space rockets to get people there. Having been dismissed by a sceptical NASA, Musk tried engaging the Russian space agency. They too were reportedly unwilling to take him seriously, placing a prohibitively high price on the table.
Elon Musk took those numbers, did the sums, mused matters for a while, and then decisively saw where the future lay. A private company could build better rockets, using a different approach to government space agencies, at a far lower cost. In 2002, SpaceX was conceived. In 2020, the company plans to send more than 30 rockets into space.
What can we learn from Elon Musk’s story, or those of other such entrepreneurs?
Think innovatively. The fact it has not been done before should spur you on, not result in self-doubt.
Execute with agility. Do enough to qualify the opportunity, then move quickly to implement, being prepared to learn and adapt through progress.
Scale-up purposefully. Set ambitious targets and focus quietly but resolutely on what’s needed to achieve them.
It’s an approach successfully used by the Jersey Financial Services Commission (JFSC) recently, following recognition of need for an innovative new financial services product.
The Jersey Private Fund launched in April 2017 in response to market demand for a simple more flexible fund option. Since then, it’s been quietly taken-up with more than 250 funds established and over £43 billion in assets now invested.
‘From launch, we’ve watched the growth of the Jersey Private Fund product with great interest,’ remarks Iain Quenault, Principal at Jersey-based trust company GlenQ Private Wealth. ‘It’s a prime example of where Jersey excels as an international finance centre. Simple but highly flexible in principle, deftly designed to meet a market need, widely promoted to raise awareness. And the take-up shows how attractive this product is for fund managers, their clients and qualifying investors.’
A Jersey Private Fund enables the pooling of capital between investors, who must be typically considered either institutional or professional, while operating on the principle of risk spreading. The maximum number of investors is 50. The minimum initial investment for each is £250,000, or other currency equivalent.
Funds can be established as a Jersey company, cell company, limited partnership or unit trust. Additionally, and importantly, they can also be set-up as non-Jersey entities provided certain conditions are met. There is no requirement for Jersey resident directors, partners or trustees, however, just an appointed Jersey-based Designated Service Provider.
‘There’s a low-cost fee to pay when registering each fund,’ continues Iain, ‘but crucially, a streamlined regulatory approach means it’s possible for the JFSC to authorise a Jersey Private Fund within 48 hours of receiving a completed application. The whole offering makes it very attractive for a wide variety of investment opportunities, including venture capital, consortiums, syndicates and family offices. For existing and new clients, we’re increasingly recommending this as the ideal fund product to choose.’
Innovative thinking. Agile execution. Quiet success. As epitomised by Elon Musk and SpaceX. The Jersey Private Fund product may not have quite the same lofty ambitions. But it does epitomise Jersey’s entrepreneurial determination to create, launch and promote leading edge financial services within highly respected regulatory standards. And, in turn, help investment schemes across the world get set for take-off.