A new fund structure which makes use of Jersey’s Incorporated Cell and Company legislation to slash the time and cost of setting up funds domiciled in the jurisdiction has been devised - a move widely expected to accelerate growth in the island’s funds sector.

The Standard Form Expert Fund (SFEF) was developed by the Jersey-based law firm Crill Canavan and the fund administrator Herald Fund and works in a similar manner to an umbrella fund. As such, individual investment funds are established as separate incorporated cells and an investment manager is appointed to each fund, with the crucial difference being that each of the separate cells can be assigned a different manager.

The costs associated with establishing funds has meant that in the past Jersey’s funds market has been compared unfavourably to those of some other jurisdictions. However, the primary advantage of this new structure, the first fund of which has already secured regulatory approval, are massive time and cost savings as fund services firms can create standard documentation for all the funds and appoint standard fuctionaries, such as custodians and auditors. The SFEF does however allow each of the funds held within the ICC to retain their individuality as elements which cannot be standardised, such as their operational terms, are placed in an appendix.

“The key advantage of standard documentation is that it has the potential to reduce the cost and time involved in setting up a Jersey regulated or unregulated fund by approximately 70 per cent when compared to more orthodox or bespoke fund structures,” said Adrian Odell, head of funds at Crill Canavan.

“This provides an incentive to investment managers to incur the initial cost of fund formation and take new investment strategies to market, and reduces the upfront risk associated with establishing a fund and assessing investor appetite.”