The first private placement fund in Jersey has been set up, taking advantage of new regulations on the island to make PPFs possible, according to the law firm that handled the rollout.

The fund, which invests in European real estate (primarily smaller structured co-investments in real estate projects and real estate related operating companies) aims to raise £150 million ($237 million), according to Bedell Cristin, the law firm.

“Jersey was already a successful jurisdiction for the fund’s promoter, a leading real estate fund manager, and the PPF regime has made Jersey an even more attractive option and was the ideal vehicle for launching their latest specialist real estate fund,” said Martin Paul, a partner at Bedell Cristin.

The private placement fund structure is designed to get “fast track” approval within three business days. PPFs are closed-ended funds available to a limited number of sophisticated institutional or professional investors and they are “similar in scope to the existing COBO (Control of Borrowing Order) private funds.”

The rollout of this structure comes as IFCs, facing regulatory pressures from overseas as well as a difficult economic climate, battle to keep ahead of competition with new structures for investors. For example, Jersey launched a new foundations system over two years ago, while neighbouring Guernsey, for example, has taken advantage of legislation to provide pension arrangements for offshore investors. At a conference in Guernsey last year at which representatives of this publication spoke, it was heard that there is a difficult balance to be struck between developing new products rapidly to meet demand, and the danger of creating structures that might lead to reputational damage or other problems later on.

The PPFs are restricted to fewer than 50 sophisticated, professional investors; investors must put in at least £250,000 or the currency equivalent. Each fund must have a licensed Jersey administrator and the Offer Document must have an appropriate investor warning.