International Private Banking
There has been a move recently to up the value curve in the private
banking sector. Jersey, which boasts one of the longest established
private banking sectors in the offshore community, has seen entry
levels for private banking decrease over recent years as ‘new
money’ investors move to the island.
The view now is that this will be reversed. Nick Owen at Flemings
Offshore says: “We have a real mix of high-value clients and
lower-value retail clients. So far we have been attempting to produce
services to suit everyone but we’ve recognised a need in the
market from our wealthier clients. When you’re talking about
investing £10 million for an individual, the corporate banks
are still finding that they can’t compete effectively.”
Flemings Managed Mutual Fund Portfolio is a good example of where
the private banks are moving to. It has a minimum investment of
£100,000.
Internatinal Private Banking & Jersey
Jersey has, however, seen an explosion of competition in the private
banking sector as banks such as the Royal Bank of Scotland International
polish their retail products and aim them at higher net-worth individuals.
Peter Shirreffs at RBSI says that 2000 will see private banking coming
more to the fore of most corporate strategies. Offshore Funds
Despite being affected by the same adverse exchange-rate movements,
the total value of funds still rose by £1.5 billion - from
£57.2 billion to £58.7 billion. The trend towards more
sophisticated funds aimed at high net-worth individuals also continues.
Internatinal Private Banking & Management
Jersey is home to some of the biggest names in fund management, including
Gartmore, Perpetual, Barclays, Foreign & Colonial and Newton,
so it’s not hard to see why business is booming. In total there
are 49 organisations carrying out fund management in Jersey. The fact
that these asset managers are offering such a wide service has also
been a key factor in their success over 1999. Trevor Falle
at Ashburton Asset Management comments: “There has been substantial
growth in this market over 1999. We’ve seen very little negative
feedback since the Edwards Report. The possible pan-European withholding
tax is still an issue, but broadly speaking Jersey has benefitted
over 1999.”
Internatinal Private Banking & Ashburton
Ashburton’s emphasis is on conservative funds and portfolios
- a market which has grown considerably. It aims its products at investors
looking for core investment strategies. Alistair Torvaney at Perpetual
regards conservative products as a growing part of the Jersey market.
He says: “Our three year-old Sterling Bond fund is still relatively
small but we are beginning to promote it more aggressively. More bond
funds will become a feature of the market next year.”
In total, Jersey provides a domicile for 1,140 funds, including umbrella
sub-funds, split across all classes from open-ended and umbrella funds
to close-ended funds. The biggest increase in funds in the
last two years has been in the umbrella class, where flexibility
and low cost have been important factors in establishing them as
a favourite with international investors. But investor attitudes
seem to be changing.
Nigel Parker of Gartmore and the Jersey Fund Managers Association
says: “There has been a noticeable diversification in the
services available on the island. Only a few years ago fund managers
were very focused on simple retail products such as offshore gilt
funds, equity funds and umbrella funds. Now there is a huge spread
across the board from institutional investments to retail funds
- but with a sharp move away from the traditional retail fund.”
Internatinal Private Banking & Perpetual
Perpetual says that only 10 per cent of its business is now retail.
Most trade is to life companies and banks that are increasingly providing
one-stop shops for investment products. Parker also attributes
this shift to a change in investor expectation and demand. A move
away from strictly performance-based funds has left room for more
subtle investment products. Changes in pension provision and medical
care has given investors a longer-term view of their financial planning.
As a result, Jersey is boasting a much more solidly-based fund industry,
according to Parker.
|
