The FCA and UK Government are proposing major regulatory reforms for alternative asset managers in order to promote economic growth.
On 7 April 2025, the FCA[1] and UK Treasury[2] released their highly anticipated consultation papers proposing regulatory reforms for alternative investment fund managers (AIFMs) with a deadline.
With a response deadline of 9 June 2025 and a more detailed consultation planned for 2026, these reforms are set to redefine the regulatory landscape in the near term.
Economic growth
The reason these regulatory reforms are being pursued is to support the UK government[3] and FCAs[4] strategic priority of economic growth.
As the size of the private markets has tripled over the past decade and with UK AIFMs AUM at £2 trillion there is a big prize to be gained.
Simplification and proportionality
The key objectives behind these proposed reforms are to create a regulatory framework that is simpler, more flexible, and proportionate to the size and activities of individual firms. By reducing unnecessary compliance costs, the FCA aims to foster greater market competition while streamlining the regulatory environment for smaller and mid-sized firms.
Proposed changes include:
Tiered system based on firm size
The FCA is proposing a three-tier structure for AIFMs, with requirements scaled according to firm size:
Large firms – more than £5 billion in assets under management (AuM) by NAV
Mid-sized firms – between £100 million and £5 billion in AuM by NAV
Small firms – under £100 million in AuM by NAV
It is important to note that under the current regime the full scope of the regime applies to AuMs above €500m.
Clearer and more focused rule sets
The regulatory framework would be organised into four distinct categories, covering each stage of the investment lifecycle:
Structure and operation of the firm
Pre-investment phase
During investment
Change-related
Flexibility for different activities
Instead of applying rigid rules across the board, the new framework would allow regulations to be tailored to the activities of the firm, ensuring that rules that are not relevant to the activities of a firm do not apply.
A dedicated venture capital regime
Recognising the unique characteristics of venture capital investments, the FCA is considering a bespoke regulatory regime for VC firms, helping to support innovation while ensuring appropriate oversight.
What does this mean for AIFMs?
The proposed changes present both opportunities and challenges for UK AIFMs. While the simplification of rules could reduce operational costs and compliance burdens, firms will need to adapt to the new framework and understand how to effectively navigate the evolving landscape.
As the consultation period progresses, it’s clear that these reforms aim to position the UK as a competitive hub for alternative asset management, with a focus on growth and innovation. At Belasko, we’re committed to helping our clients stay ahead of regulatory changes and leverage the benefits of a simplified regulatory environment.
We would be delighted to hear your view on how the proposed changes could impact your business. If you’d like to discuss further, please get in touch with Nick McHardy, Head of Funds.
Trade wars are nothing new and the era of Donald Trump’s trade wars started in 2018, during his first term. Primarily focused on steel and aluminium and phrased in terms of protecting the U.S.’s national security interests, this initial foray into trade tariffs targeted China in the main, with Mexico, Canada and the EU also feeling the impact.
But as the U.S. aggressively pursues new tariffs under the new Trump administration’s economic strategy, the global investment landscape is witnessing seismic shifts. Nothing, and no country, it seems, is outside of scope and retaliatory actions suggest that the impact will not be short lived. The Trump Administration has hinted that it is accepting of stock market volatility in pursuit of what it sees as its national interests, at least in the short term. But with this backdrop, are we facing a more prolonged period of trade tensions that will fragment global free trade principles?
Private Equity (PE) has played an increasingly significant role in global financial markets over the last quarter of a century and investor appetite remains very strong. But PE fund managers must now navigate an evolving terrain marked by heightened market volatility, shifting trade dynamics, and unforeseen economic consequences. While risks abound, those with strategic foresight and ample dry powder may find unique opportunities amid the chaos.
Direct impact of U.S. tariffs on private equity
The imposition of U.S. tariffs on key imports—ranging from steel and aluminium to semiconductor components—has created ripple effects throughout global financial markets. Private markets are not insulated from these effects and PE-backed portfolio companies in manufacturing, technology, and consumer goods now face higher input costs and compressing margins, forcing operational recalibrations.
In general, increased production costs will lead to a wave of strategic restructuring considerations, with firms exploring reshoring, alternative supply chains, and cost-cutting initiatives to mitigate the impact. However, the prolonged uncertainty surrounding trade policies will hamper investment confidence, delaying expansion plans and prompt portfolio reassessments.
Sector-specific PE exposure
Recent data underscores PE’s significant exposure to the sectors most vulnerable to trade tariffs:
Manufacturing: The year’s start for sectors like industrials and manufacturing has dropped to decade lows with only 170 deals recorded so far in 2025 compared to 252 in the same period 2024[1]. This decline is partly due to growing uncertainty about tariffs, as dealmakers are increasingly cautious about taking on tariff-related risks. As trade policies remain volatile, many buyers are hesitant to engage in deals that could be impacted by changing tariff regulations.
Technology: Software and technology services are particularly vulnerable in specific areas:
Semiconductors: Existing U.S. tariffs on Chinese semiconductor components introduced under the Biden administration have increased costs for chip manufacturers and downstream industries relying on advanced computing technologies. The Trump administration’s proposed changes to the CHIPS and Science Act, including potential tariffs on the semiconductor industry, have raised concerns about increased costs for consumers and potential hindrances to AI sector growth due to higher chip prices[2]. Additional tariffs hinted at under President Trump will be particularly concerning for AI startups, cloud computing providers, and automotive technology firms.
Hardware manufacturing: Companies producing laptops, networking equipment, and telecom infrastructure face increased costs due to tariffs on imported components. Anticipating tariff hikes in the aftermath of the U.S. elections, companies like Microsoft, HP, and Dell have been stockpiling Chinese-made electronic components and exploring alternative manufacturing locations to mitigate potential cost increases[3]. PE-backed firms with significant exposure to hardware may struggle to maintain profit margins.
Telecommunications and 5G: Restrictions on Chinese telecom suppliers and increased tariffs on network equipment have disrupted expansion plans for telecommunications providers. Telecom equipment manufacturers are facing significant challenges due to the tariffs, complicating planning and operations[4]. PE-backed firms in this space may face challenges in infrastructure rollouts and cost escalations.
While the broader tech sector is affected, Software as a Service (SaaS) companies and digital-first businesses remain relatively insulated. Many PE firms with technology exposure have leaned into software acquisitions, avoiding tariff-sensitive hardware businesses.
Consumer goods: Although buoyant in Q4 2024 with twice as many deals announced (377) against the previous quarter[5]. Consumer goods remain exposed to the effects of tariffs, with beverages being a particular target at the moment. Add to this the cost-of-living impact of higher inflation from prolonged trade disputes will leas to increasing headwinds for the sector, impacting valuations and deal volume.
Automotive: PE-backed deals surged by 85% in the U.S. and globally, driven by investor confidence in sectors like automation and capital equipment. The automotive sector also saw significant growth, with PE buyouts reaching $22 billion in the second half of 2024, a nearly 250% increase from the first half[6]. However, the sector now faces renewed uncertainty following the recent announcement of a 25% tariff on car and car part imports, which could impact supply chains and investment sentiment.
While many PE managers are exposed to these industries, others maintain portfolios that are more insulated. Firms with diversified holdings in sectors less affected by tariffs – such as healthcare, professional services, and software-as-a-service (SaaS) – may experience fewer headwinds. This resilience underscores the importance of portfolio composition in mitigating trade-related risks.
The impact of reciprocal tariffs and global trade retaliation
The retaliatory tariffs imposed by China, the EU, and other trading partners have added further complexity. U.S. companies heavily reliant on exports—particularly in the agriculture, automotive, and industrial manufacturing sectors—face declining international sales and profit erosion. For PE firms invested in these sectors, this could translate to valuation pressures and prolonged holding periods.
Moreover, the broad-based impact on multinational supply chains has led to a reassessment of cross-border investment strategies. Foreign direct investment in the U.S. totalled $72.5 billion in the third quarter of 2024, down 23% over the second quarter of 2024[7], reflecting a cautious stance among international investors. Such shifts could limit exit opportunities for PE firms looking to offload assets to global buyers.
Indirect impacts: Macro factors, IPO market, and M&A activity
Beyond the direct effects, a prolonged trade war could trigger broader macroeconomic consequences that PE fund managers must contend with:
Market volatility and investor confidence: Equity markets remain volatile amid inflation concerns, economic slowdown fears, and recent U.S. tariffs on key trading partners. To characterise this, the S&P 500 reached an all-time high in February 2025 only to fall by over 10% by mid-March, largely due to steel and aluminium import tariffs. Over the same period (February to March) the Consumer Confidence Index fell from 100.1 to 92.9, its lowest point since January 2021 and fourth consecutive monthly decrease but for a late revision to the February number. This doesn’t bode well for investor confidence and will likely lead to slower decision making.
IPO market hesitancy: The uncertainty surrounding trade policies has dampened an already subdued IPO market, which could cause major private companies—including AI-driven and tech firms—to delay their public offerings. The VIX Volatility Index (also known as the Fear Index!) exceeded 27 in early March, representing one standard deviation from long-term averages, underscoring heightened investor anxiety.
M&A slowdown: Recent data indicates a significant decline in global M&A activity, influenced by rising uncertainty and geopolitical tensions. As of the end of the first quarter of 2025, announced deals have decreased by nearly 30% compared to the previous year, marking the slowest deal activity in over a decade[8]. While well-capitalised firms remain active, mid-market transactions have slowed as sellers hesitate to accept lower valuations.
Opportunities amid the chaos: deploying dry powder and capitalising on dislocations
Despite these headwinds, PE firms with high levels of dry powder—estimated at $2.5 trillion globally—are uniquely positioned to capitalise on market dislocations. Distressed asset opportunities are emerging, particularly in tariff-exposed industries where valuations have compressed. Fund managers with sector expertise and rapid deployment capabilities can execute value-driven acquisitions at attractive multiples.
Additionally, the shifting trade landscape is fostering domestic investment opportunities. Companies seeking to mitigate tariff risks are reshoring operations, fuelling demand for infrastructure investments, logistics hubs, and localised supply chain solutions. PE firms focusing on these trends may benefit from government incentives and evolving industrial policies.
Risks for future capital raising
While opportunities exist, the prolonged trade conflict introduces risks to future capital raising. Institutional investors may adopt a more cautious stance, scrutinising fund performance amid heightened volatility. Fundraising cycles could lengthen, particularly for firms with exposure to tariff-sensitive industries.
Moreover, the macroeconomic implications of sustained trade conflicts—including potential recessions, higher inflation, and tighter monetary policies—could dampen investor appetite. As of early 2025, 60% of LPs surveyed in PEI’s LP Perspectives Study 2025[9], indicated concerns about deploying fresh capital in an uncertain geopolitical environment.
Strategic considerations for PE fund managers
To navigate the complexities of Trump’s trade wars, PE fund managers should:
Reassess portfolio exposure: Conduct stress testing on tariff-sensitive sectors and adjust risk mitigation strategies accordingly.
Maintain exit flexibility: Explore alternative exit routes beyond IPOs, including secondary buyouts, strategic sales, and recapitalisations.
Identify opportunistic deployments: Leverage dry powder to acquire undervalued assets in disrupted industries.
Engage with investors proactively: Maintain transparency with LPs regarding trade war implications and potential mitigation strategies.
While the unintended consequences of Trump’s trade policies pose significant challenges, they also present unique opportunities for private equity firms with the agility to adapt. Navigating this landscape requires a combination of strategic foresight, disciplined capital deployment, and proactive portfolio management. Those who can seize emerging opportunities while mitigating risks will position themselves for long-term success in an evolving global economy.
At Belasko, we recognise the complexities and evolving risks that private equity managers must navigate in the wake of shifting global trade policies. We stay informed on the latest developments and the potential impacts on our clients and their investment strategies. If you’d like to discuss further, get in touch with Paul Lawrence, Managing Director ([email protected]).
Last Thursday, 6 March, the BVCA hosted its Diversity, Equity & Inclusion: International Women’s Day event in London, where Alice Heald, head of marketing, joined industry leaders to discuss the latest progress in gender diversity within private equity and venture capital. The event that highlighted recent findings from the BVCA’s Diversity & Inclusion Report and explored key themes around mentorship, role models, and strategic career development for women in the industry.
Encouraging progress in representation
According to the BVCA report[1], women now make up 27% of investment professionals in PE and VC firms in the UK, up from 24% in 2023. Since the BVCA’s first study in 2018, the industry has seen consistent, albeit slow, progress in gender diversity.
Senior and mid-level representation: Women in senior investment roles have risen to 15%, while mid-level representation has increased to 17%, both seeing a 3-percentage point rise.
VC vs. PE: Venture capital firms continue to show stronger female representation, with 10% more senior and mid-level women compared to private equity firms.
The power of role models and mentorship
A recurring theme throughout the event was the impact of mentorship and sponsorship in supporting women’s career development. Industry veterans shared insights on career growth, risk-taking, and the importance of paying it forward.
Key takeaways:
Take risks and avoid over-planning: Women should be encouraged to take on new challenges without over-planning their careers, a personality trait often seen in women that can sometimes hold us back.
Building strategic networks: It’s important to think beyond immediate job roles and proactively seek opportunities to upskill, show initiative and volunteer, and gain visibility.
The role of sponsorship vs. mentorship: Organic sponsorship—where senior colleagues naturally champion junior talent—was highlighted as a critical factor in career progression. Unlike mentorship, which often focuses on guidance and advice, sponsorship involves actively advocating for someone’s career advancement. Sponsors open doors, provide visibility, and push for high-potential individuals to take on leadership roles.
Allyship and industry-wide change: Meaningful change requires the engagement of men in the industry, given that they still make up the majority. We can’t do it alone.
The advantage of standing out: While being a minority in the industry can be challenging, it also presents an opportunity to be memorable. Women should leverage this visibility to advance their careers.
Paying it forward: Senior female leaders highlighted the importance of investing in the next generation by mentoring, sponsoring, and creating opportunities for emerging talent. This culture of ‘paying it forward’ helps build a sustainable pipeline of female leaders in the industry. The industry must work collectively to showcase the opportunities available and support female talent at every stage.
Final thoughts
The event reaffirmed that while progress is being made, there is still much work to do. Women continue to face unique challenges in the financial services industry as a whole, but through strong role models, mentorship, and strategic risk-taking, the path to leadership is becoming clearer.
For firms looking to drive change, the message was clear: support must come from the top down, and a proactive approach to sponsorship, networking, and inclusion will be key to shaping a more diverse and equitable future in the private market sector.
Luxembourg has cemented its status as a leading hub for fund management, particularly in the realm of private closed-ended funds. With its combination of robust legal and regulatory frameworks, international recognition, and strategic geographical advantages, Luxembourg offers an attractive proposition for fund managers looking to establish their next investment vehicle. Greg McKenzie, our Luxembourg Country Head, shares more on the benefits and opportunities this thriving jurisdiction can offer to ensure success.
The appeal of Luxembourg as a fund destination
Luxembourg, which is home to €5,840.177 billion in net assets under management as at November 2024[1], has been a cornerstone of the global financial sector for over 60 years, gaining international recognition for its stability, innovation, and adherence to high standards. It is also “white-listed” by the Financial Action Task Force (FATF), underscoring its commitment to combating money laundering and financing terrorism.
One of Luxembourg’s most compelling features is its robust legal and regulatory framework, which provides a secure environment for fund operations as well as offers unrestricted marketing opportunities into key regions like the US and the Middle East.
The country boasts an extensive network of double taxation treaties, ensuring tax efficiency and reducing the risk of double taxation on income, gains, and dividends. However, the applicability of these treaties depends on the specific legal form and tax status of the fund. Certain fund vehicles may be considered tax-transparent, meaning the tax treaties may apply at the investor level rather than the fund level. Therefore, careful consideration of the fund structure is essential to fully benefit from these treaties.
Luxembourg-based AIFs benefit from the ability to market into the European Economic Area (EEA) through the passporting mechanism provided under the Alternative Investment Fund Managers Directive (AIFMD). It is important to note that the AIFMD passport is available to AIFs managed by authorised AIFMs. This passport allows marketing to professional investors across the EEA without additional national requirements. However, marketing to retail investors or non-EEA investors may still be subject to national regulations and private placement regimes[2].
The country also offers a strategic location with strong transport links to major financial centers like London and other parts of Europe. Being in the European time zone allows for seamless coordination with global markets, making it easier for fund managers to conduct business across different regions.
Typical Fund Structures
The Special Limited Partnership (SCSp)
When it comes to fund structuring, the SCSp is one of the most commonly used legal forms in Luxembourg. Introduced in 2013, the SCSp is modelled after an ‘Anglo-Saxon’ GP/LP structure, offering flexibility and familiarity for managers accustomed to similar vehicles in other jurisdictions. Governed by the law of 10 August 1915, as amended, on commercial companies, the SCSp allows the general partner to manage the fund’s affairs while limited partners/investors participate without being involved in day-to-day operations[3].
The SCSp structure is particularly well-suited for funds, feeders, and co-investment vehicles and fund promoters play a crucial role in supporting the investment management and oversight activities, ensuring sufficient local management and control, which is vital for compliance with local regulations.
Luxembourg’s regulatory environment requires fund managers to demonstrate adequate local management and control, which may necessitate the appointment of local directors or establishing a physical presence in the country. These substance requirements are crucial for tax residency purposes and to benefit from Luxembourg’s extensive network of double taxation treaties[4]. Ensuring sufficient local substance helps in affirming that the central administration and decision-making processes are effectively conducted within Luxembourg[5].
Regulatory options in Luxembourg
Luxembourg offers two primary regulatory options for private capital funds: the Unregulated AIF and the Reserved Alternative Investment Fund (RAIF). Neither option is subject to direct supervision by the Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial regulator, nor do they require prior approval. This flexibility can be advantageous for managers looking to avoid the delays and costs associated with regulatory approvals. Other unregulated options may also be beneficial for funds not intended for marketing.
While Luxembourg offers unregulated fund structures, like the (SCSp) which are not subject to direct CSSF supervision, these structures must still comply with relevant laws, including the law of 12 July 2013 on alternative investment fund managers (AIFM Law), if they qualify as AIFs. This means that while the fund itself is unregulated, the AIFM managing the fund must be authorised or registered under the AIFM Law, ensuring compliance with certain regulatory standards.
However, fund managers should engage legal counsel early in the planning process to determine the most suitable structure and regulatory solution for their specific needs. Legal advisors typically assist with the drafting of constitutional documents, such as the Limited Partnership Agreement (LPA) and side letters, and provide guidance on marketing and tax considerations. This ensures compliance with local regulations and optimises the fund’s structure from a tax perspective.
Belasko in Luxembourg
Luxembourg stands out as a premier destination for fund managers looking to establish their next private closed-ended fund. With its internationally recognised finance sector, robust legal and regulatory framework, and strategic location, Luxembourg offers a wealth of opportunities for private capital fund managers and investors alike. However, its crucial to work closely with expert third party providers, leveraging their expertise in alternative investments to successfully navigate any challenges and unlock the potential of this dynamic jurisdiction.
Belasko in Luxembourg, incorporated in November 2020, has rapidly established itself as a trusted partner for Alternative Investment Funds (AIFs) in the Luxembourg market.
Our team, comprised of seasoned professionals, has extensive experience in servicing global private capital firms and investment companies. We excel in managing complex AIFs and holding structures, offering comprehensive end-to-end fund administration and corporate services.
With a deep understanding of the Luxembourg regulatory landscape, we provide a personalised, reliable, and proactive service, helping clients navigate the complexities of private capital investments with confidence.
If you’d like to speak to our team about setting up your fund in Luxembourg, please get in touch with Greg McKenzie (Country Head) at: [email protected].
Our Luxembourg Country Head, Greg McKenzie, shares his insights on the impact of digital transformation in financial services and how trust, transparency, and collaboration are the foundations of long-term success.
What motivated you to join the British Chamber of Commerce Luxembourg?
Belasko joined the British Chamber of Commerce Luxembourg to engage with a dynamic network of professionals, share insights, and collaborate on opportunities that promote business development in Luxembourg and beyond. The Chamber provides a platform for fostering relationships, staying updated on key developments, and participating in discussions on the future of business in Luxembourg. As Belasko continues to grow and strengthen its presence in the region, we see the Chamber as an ideal way to support our strategic objectives and contribute to the local business community.
What is the hottest topic in your business right now?
One of the hottest topics at Belasko right now is digital transformation in financial services. We’re seeing increasing demand for more efficient, transparent, and scalable solutions that leverage technology to enhance client service. A key driver of this change is the rise of AI and automation, as clients look for smarter, automated solutions that streamline processes, enhance decision-making and provide deeper insights. At Belasko, we’re working to innovate and build on these trends, providing our clients with sophisticated tools and solutions that ultimately create more value and drive success.
What is the best piece of business advice you have received?
The best piece of business advice I’ve received is to always focus on building strong relationships, both with clients and within the team. Trust, transparency, and collaboration are the foundations of long-term success. This advice has guided my approach to leadership at Belasko, where fostering a culture of open communication and teamwork ensures that we not only meet our clients’ needs but exceed their expectations.
Jersey’s finance industry finds itself at the intersection of global economic shifts, geopolitical uncertainty, and a stabilising interest rate environment.
With growth in private capital assets set to reach even greater heights, Preqin predicts growth of $30 trillion in global alternative assets under management (AUM) by 2030 (up from $16.8 trillion expected by 2025)[1]. Following a challenging period, venture capital managers anticipate a rebound in 2025, although private debt remains the darling asset class. Despite a more cautious recent investor sentiment awaiting a more stable and predictable interest rate environment private debt is projected to reach $2.9 trillion by 2029.
Recent discussions at key industry events highlighted the evolving landscape and the opportunities for growth on the horizon for Jersey’s financial services sector.
Navigating Trump 2.0: A changing global investment landscape
Geoff Cook recently shared his views on how the return of Donald Trump to the White House is set to reshape global investment dynamics[2]. Trump administration’s ‘America First’ policies, renewed focus on trade protectionism, and shifts in tax regulations will impact financial centres worldwide. For small-state international finance centres (IFCs) like Jersey, this presents both challenges and opportunities.
Global risk and investment flows: A second Trump presidency will reshape global investment dynamics. His policies on trade, diplomacy, and foreign relations could create volatility but also opportunities for IFCs as investors seek stable jurisdictions amid geopolitical uncertainty.
Tariffs and supply chain adjustments: We are already seeing Trump take a firm stance on tariffs, driving protectionist measures and reshaping global trade. This could disrupt supply chains, raise inflation, and impact industries like EVs, tech, and agriculture. IFCs could play a pivotal role in facilitating capital flows, supporting companies relocating production and diversifying supply chains to mitigate tariff risks.
Tax and corporate structures: Trump’s return to office will almost certainly challenge the OECD’s Pillar two initiative on Base Erosion and Profit Shifting. Although the OECD’s push for a 15% global minimum tax rate has gained traction, Trump is likely to re-evaluate this initiative for the US. His proposed two-tier corporate tax system could see ‘Made in America’ firms benefit from a 15% rate, while foreign companies continue to pay 21%. This approach may drive renewed interest in tax-efficient jurisdictions, making IFCs more attractive for multinational corporations and capital flows.
Tech and geopolitical friction: The ongoing US-China tech standoff will shape investment trends, deepening the global technological divide. IFCs are well-positioned to attract fintech and blockchain ventures, reinforcing their roles as key players in the evolving global tech landscape.
Trade and digital transformation: Global trade is shifting from multilateral agreements to regional and bilateral deals, potentially sidelining institutions like the World Trade Organisation. IFCs could play a growing role in facilitating regional trade agreements and digital trading hubs. Meanwhile, a more crypto-friendly U.S. administration may accelerate the integration of digital assets into global trade, offering new opportunities for private capital investors.
UK economy: A mixed outlook
The UK’s economic outlook remains uncertain, yet it continues to attract significant international investment. According to PwC’s Annual Global CEO Survey[3], the UK has risen to become the second-most attractive global destination for international investment, ranking behind only the US. With a new Labour government prioritising economic growth, investment opportunities may continue to expand. Although a softer tone is being taken by Trump towards the UK for now, potential disruptions from his trade policies risks softening UK exports, contributing further to global inflationary pressures.
While UK growth in 2025 is expected to be sluggish, it remains more positive than the EU average. As a close financial partner to the UK, Jersey is well positioned to support investment structures that navigate these shifting dynamics.
Jersey’s competitive edge: seizing the moment
Jersey’s finance industry is well-positioned to capitalise on global shifts, supported by a stable regulatory and tax environment. Key opportunities include expanding Jersey’s role in UK real estate, private equity, and venture capital—particularly in tech. The Island’s appeal as a hub for VC investment continues to grow, with Monterey data reporting that 246 VC funds were launched in Jersey in 2024. At the same time, Jersey should continue strengthening ties with promoters in the US, Middle East, and Asia, who are looking to leverage the opportunities presented by AIFMD II.
To attract business to the Island, Jersey needs to continue enhancing product offerings and regulatory frameworks. Jersey Finance noted at their Global Horizons event, the key developments in 2024 that will continue to be a focus in 2025. These included the expansion of Limited Liability Companies (LLCs) for broader use cases, updates to the Jersey Private Fund (JPF) Guide to align with professional investor needs, legislative amendments for limited partnerships to incorporate digitalisation and tokenisation frameworks, and potential new regimes for carried interest vehicles and European Long-Term Asset Funds (ELTAF).
In terms of market focus and expanding the island’s global reach, the US is set to offer great opportunities for Jersey, particularly for private wealth in hubs like Miami, New York and even LA. With continued growth taking place in the Middle East, the region is still a key focus for Jersey for both the private wealth and funds industries. Saudi Arabia is showing growing potential as well as Dubai which continues to be one of the biggest market opportunities for Jersey globally. In Kenya and South Africa, opportunities for private wealth, private equity and infrastructure are emerging and Jersey is well-positioned to support HNWIs, family offices, and businesses seeking international finance solutions as interest in global diversification is on the rise.
Key themes set to shape the future of Jersey
Tokenisation: Tokenisation is seen as a critical area for Jersey’s future in the funds industry. As the financial world increasingly embraces digital transformation, tokenisation is gaining traction. Jersey, with its well-established legal and regulatory framework, is positioned to be a leading jurisdiction for the tokenisation of assets.
Islamic finance: Islamic finance continues to offer substantial growth opportunities and Jersey is solidifying its position as a stable and credible jurisdiction of choice for Islamic finance products. The island’s flexibility in structuring Sharia-compliant investment vehicles make it an attractive destination for the structuring of Islamic finance deals, including Private Funds (JPFs) and structured finance transactions.
Women in wealth: The increasing leadership of women in wealth management is a powerful trend, with more HNW families being led by women. Over the past decade, female participation in wealth management and leadership roles has doubled, reflecting broader societal shifts toward gender equality. In particular, as more Middle Eastern women seek stable, confidential, and Shariah-compliant solutions, Jersey offers a robust financial ecosystem with secure wealth structuring, governance, and succession planning options.
Positioning Jersey for the future
As global markets evolve, Jersey’s finance industry must remain agile, proactive, and outward-looking. By leveraging its regulatory strengths, digital infrastructure, and global partnerships, Jersey is well-positioned to thrive in 2025 and beyond. With a focus on alternative assets, private wealth, and innovation, the island will continue to cement its status as a premier international finance centre in a rapidly changing world.
At Belasko, we provide innovative fund administration, corporate services, and private wealth solutions in Guernsey, Jersey, the UK and Luxembourg. With a commitment to delivering bespoke, high-quality services, Belasko partners with fund managers, high-net-worth individuals, families, and entrepreneurs. Powered by leading technology, Belasko’s helps clients navigate complex financial landscapes, unlocking new opportunities and achieving success.
We look forward to another year of growth and collaboration with our partners across the world. If you’re interested in discussing our Jersey offering in more detail, get in touch with Paul Lawrence ([email protected]).
A big thank you to the Guernsey Business Development team for delivering an insightful briefing on the opportunities that lie ahead in 2025.
Guernsey’s financial services proposition remains highly attractive to businesses and investors in the UK, South Africa, the US, and the Middle East. The team has been instrumental in fostering strong connections in these regions, helping to showcase the jurisdiction’s expertise in fund administration, private wealth, and insurance solutions.
Expanding presence in the UK and North of England
Rowan Stone highlighted the growing opportunities in the North of England, where Guernsey firms have seen notable success. Manchester, in particular, has experienced stellar economic growth, driven by a diverse range of industries, including marketing, creative media, digital and technology, financial services, and life sciences. This vibrant business landscape presents a strong foundation for further collaboration and investment.
Strength in captive insurance and innovative structures
William Lewis underscored Guernsey’s global reputation in captive reinsurance, emphasising the advantages of its robust regulatory framework and innovative products such as the Protected Cell Company (PCC). These structures continue to attract interest from international firms looking for flexible and efficient risk management solutions.
Emerging opportunities in South Africa and the Middle East
Traditionally dominated by wealth management, markets such as South Africa and the Middle East are now witnessing the rise of family offices and institutional asset management. Grant McLeod, who leads business development in South Africa, noted significant growth in International Pension structures, Open and Closed-Ended Funds, and Wealth Management solutions that leverage Guernsey’s expertise. Further expansion opportunities are emerging in Nigeria, Botswana, and Morocco, as more investors seek sophisticated cross-border financial solutions.
Strengthening US ties through intermediary networks
In the US, Jonny Gamble’s efforts have focused on deepening relationships with intermediaries and asset managers. This strategic approach has not only raised awareness of Guernsey’s financial services but also positioned the jurisdiction as a highly efficient hub for global capital raising. With increasing demand for structured and well-regulated financial solutions, Guernsey’s proposition is resonating with US-based firms seeking stability and expertise.
Looking ahead to 2025
As we move into 2025, Guernsey’s ability to adapt, innovate, and build on its core strengths will continue to drive international business development. With a strong global network and a forward-thinking regulatory environment, Guernsey remains a prime destination for financial services firms looking to expand their reach.
At Belasko, we provide alternative investment fund managers with tailored and innovative fund administration solutions in Guernsey, Jersey and Luxembourg. Our expertise spans private equity, venture capital, private credit, and real estate, supporting clients with bespoke structures that align with their investment strategies. Powered by leading technology, we streamline fund operations, enhance transparency, and help our clients achieve their optimal target operating model with ease.
We look forward to another year of growth and collaboration with our partners across the world. If you’re interested in discussing our Guernsey funds offering in more detail, get in touch with Ross Youngs ([email protected]).
In the evolving landscape of private equity, continuation funds—also known as GP-led secondary transactions—are experiencing unprecedented growth. According to recent data, the number of these funds grew by 48%, reaching 73, with Preqin noting 25 additional vehicles already in 2024[1]. This surge reflects a fundamental shift in how general partners (GPs) manage high-potential assets, allowing them to extend their holding period beyond a traditional fund’s lifecycle.
By moving selected assets into a continuation fund, GPs can continue executing strategic initiatives for key assets, providing a flexible solution to market demands and investor preferences alike.
Nick McHardy, our Head of Funds at Belasko, and Sam Kay, a London-based private equity funds partner at the international law firm Dechert, share their views on the growing interest in continuation funds and adoption of these fund structures globally.
Why continuation funds are the preferred choice for modern GPs and LPs
Unlocking extended value creation
A primary driver for the popularity of continuation funds is the extended runway they provide for asset management and growth. Traditional private equity structures, often capped at a 10-year lifespan, can constrain GPs from fully capitalising on the potential of high-performing assets.
Continuation funds empower GPs to continue their strategic initiatives, ultimately enhancing value for investors. In the first half of 2024, GP-led transactions accounted for $31 billion, making up 43% of the total secondary market volume[2]. This reflects a 94% increase compared to the same period in 2023, driven by strong demand for continuation funds and the adoption of GP-led structures by sponsors seeking liquidity for LPs and extended holding periods for valuable assets[3].
Liquidity with flexibility
Continuation funds introduce a new level of liquidity and flexibility for limited partners (LPs). LPs can choose to cash out or reinvest in the continuation fund, accommodating their unique capital requirements. In Coller Capital’s 40th Global Private Capital Barometer, the demand for continuation funds remains strong, with about half of surveyed LPs planning to access the secondaries market, including continuation fund structures, within the next two years[4].
Sam Kay comments that: “We are now seeing dedicated funds being raised to invest specifically into continuation funds and GP-led secondaries, which indicates the attractiveness of these opportunities for institutional investors. In general, LPs are also increasingly sophisticated and are able to deal with the complexity of a continuation fund transaction”.
Strengthening GP-LP alignment
Continuation funds also foster a strong alignment of interests between GPs and LPs, ensuring GPs can retain control over key assets and adhere to the original fund objectives. This continuity can reassure both existing and new investors seeking stability and alignment in asset management strategies. As Sam Kay notes “There are a number of tools for a GP to build alignment with its investor-base. Over a number of years, we have witnessed the increase in co-investment activity and now we are seeing continuation funds being increasingly used. With continuation funds, there is a real sense of GPs and LPs working together to create that ‘win-win’ situation”.
Adapting to market dynamics with continuation funds
As private equity markets mature, investors are prioritising flexibility and optimised returns over longer periods. The traditional private equity model’s rigid timelines often don’t cater to the evolving demands of sophisticated investors. Continuation funds, by offering dynamic investment options, present a modern alternative that accommodates changing market conditions and investor requirements.
In Dechert’s 2025 Global Private Equity Outlook[5], 65% of respondent private equity firms noted that the increase in GP-led secondaries dealmaking was being driven by the demand for flexible holding periods for portfolio companies. The increased transaction volume in this sector reflects its growing role in private equity, as GPs and LPs seek solutions that extend value beyond the limitations of conventional fund structures.
Global adoption of continuation funds: trends and insights
Regional hotspots for continuation funds
The adoption of continuation funds has varied across regions and North America remains a dominant player with over 60% of global GP-led secondary market activity originated in the US[6]. This reflects a continued strong appetite for these deals in the region, especially multi-asset continuation fund transactions. With its mature private equity market and sophisticated investor base, the U.S. has been quick to recognise the benefits of continuation funds.
In Europe, countries like the UK and Germany continue to show significant momentum as investors embrace continuation funds for enhanced asset management and liquidity solutions. Meanwhile, in Asia, regions such as China, Japan, and India are beginning to explore these vehicles as private equity activity intensifies, driving a need for flexible investment options.
“The responses in our 2025 Global Private Equity Outlook back up these trends” says Dechert’s Sam Kay. “It is encouraging for, globally, almost a fifth of private equity firms (17%) are expecting to increase dealmaking through GP-led secondaries over the next two years but there are regional differences: in North America, the figure rises to 22% whereas in EMEA it is 14% and Asia-Pacific it is 10%”.
Continuation funds mark a transformative shift in the private equity landscape. Their rise addresses a critical need for extended value creation, tailored liquidity options, and alignment with investor interests. As market dynamics continue to evolve, the strategic advantages of continuation funds are anticipated to fuel their growth, offering investors and fund managers flexible solutions to adapt to a complex investment landscape.
How Belasko can support your fund continuation strategy
As a next-generation fund administration partner, Belasko provides a tech-driven approach focused on delivering customised client solutions. Our full scope, tailored fund administration services are designed to drive performance throughout the fund lifecycle – from establishment and capital deployment to realisation and wind up, we’re the experts when it comes to streamlining your operations.
Our experienced team of 120 experts, strategically located across the United Kingdom, Luxembourg, Jersey, and Guernsey, ensures precise, professional service across multiple asset classes. With over $12 billion in assets under administration (AUA), Belasko is well-equipped to offer personalised, innovative support for your continuation fund needs.
Get in touch with Nick McHardy ([email protected]) to discuss further.
About Dechert
Dechert is a global law firm that advises asset managers, financial institutions and corporations on issues critical to managing their business and their capital – from high-stakes litigation to complex transactions and regulatory matters. Its 1,000+ lawyers across 19 offices globally focus on the financial services, private equity, private credit, real estate, life sciences and technology sectors. Dechert’s global Secondaries and Sponsor-led Liquidity Solutions team has been involved in secondaries transactions for over two decades, advising sponsors, buyers and sellers on all types of GP and LP-led transactions and liquidity solutions, ranging from ordinary course sales of LP interests, to the most complex single and multi-asset continuation funds involving significant M&A transactions, NAV facilities, preferred equity funding and structured solutions. Find out more at www.dechert.com.
[1] Preqin, “Continuation Fund Vehicles 2023 Report”
With 2025 activity well under-way, the venture capital landscape is poised for a dynamic resurgence, teeming with opportunities despite lingering economic uncertainties. The global venture capital investment market is projected to reach approximately $764.78 billion by 2029, with it growing from $301.78billion in 2024 to $364.19 billion in 2025[1].
On top of that, VC fundraising activity is also expected to surpass 2024 levels in 2025 with capital to be raised for this year projected at approximately $90 billion, compared with $71 billion in 2024 through mid-November[2].
In 2025, the biggest opportunities for venture capital are in transformative technologies like artificial intelligence (AI), which is dominating investment activity. While healthcare and sustainability are also attracting attention, the expansion of AI applications into these areas is further driving investment growth. Green technologies, spurred by ESG mandates and climate-conscious investors, are gaining momentum as governments prioritise sustainability goals. Meanwhile, healthcare innovation continues to attract substantial funding, with startups focusing on digital health, personalised medicine, and biotech breakthroughs leading the charge.
For VC investors, 2025 presents a year of recalibration and opportunity, where strategic investments in high-growth sectors could yield significant returns. Here we layout the six key trends that highlights how the industry is evolving and where the focus is shifting.
1. AI investment surge
At the end of 2024, venture capital investment in artificial intelligence (AI) reached unprecedented levels. VC activity in generative AI has grown exponentially since the release of OpenAI’s ChatGPT in late 2022. In 2024, this trend reached new heights with global venture capital investment in GenAI reaching around $45 billion in 2024, up from $24 billion in 2023[3]. This momentum is fuelled by the transformative potential of GenAI across various sectors, from healthcare to finance. As AI continues to innovate and find commercial applications, venture capital is increasingly pouring into the sector, marking 2024 as a milestone year in AI investment. Read more on this trend in EY’s article here.
2. The rise of mega-deals and emerging unicorns
The proliferation of unicorns—private startups valued at over $1 billion—continues to be a focal point of venture capital activity. Globally, the number of unicorns surpassed 1,200 by May 2024[4], with some hectocorns valued at over $100 billion, such as ByteDance (the Chinese company behind TikTok)[5]. However, Europe’s unicorn herd experienced limited growth in 2024. According to PitchBook, only 14 startups in Europe reached unicorn status last year, the same as in 2023 and down nearly 70% from the peak in 2022[6].
This stagnation reflects tighter market conditions and cautious investment strategies. Nevertheless, venture capitalists are optimistic about a rebound in dealmaking and valuations in 2025, particularly driven by the thriving AI sector. Many anticipate a renewed surge of European startups crossing the €1 billion valuation threshold this year, with AI companies leading the way.
3. Healthcare innovation continues to thrive
Venture capital is pouring into healthcare innovation, with startups focused on digital health, personalised medicine, and biotech breakthroughs leading the charge. These advancements are not only improving patient care but also reshaping the future of healthcare systems globally. As the sector evolves, the intersection of AI and healthcare is expected to attract further investment, offering huge growth potential for innovative startups in 2025.
4. Momentum in green technologies
Green technologies are gaining increasing momentum, driven by ESG mandates and a wave of climate-conscious investors. With governments prioritising sustainability goals, the demand for clean energy, carbon capture, and sustainable infrastructure solutions is expected to rise sharply. As the market matures, startups in these sectors are attracting substantial venture capital, offering huge potential for growth in 2025.
5. Private wealth fuelling emerging VC firms
Private wealth is becoming an increasingly vital source of capital for emerging venture capital firms. Family offices and high-net-worth individuals are allocating significant portions of their portfolios to private markets, providing a lifeline for up-and-coming VCs. This trend is expected to continue, with private wealth set to deploy approximately $7 trillion to private markets by 2033[7]. These trends underscore the evolving nature of the VC landscape, highlighting areas where innovation and investment are converging to shape the future.
6. Channel Islands offering speed to market for VC funds
The choice of fund domicile is playing an increasingly critical role in VC fund establishment, with the Channel Islands and Luxembourg leading the way. For emerging managers, jurisdictions like Guernsey and Jersey are appealing due to their simplicity, investor familiarity, and speed to market. These jurisdictions offer a lower-cost and less administratively burdensome alternative to some European domiciles while maintaining high regulatory standards.
Guernsey, in particular, remains a premier jurisdiction for European venture capital funds. Twice as many VC funds were raised in Guernsey during 2022-2023 as compared to the next most popular jurisdiction. Its appeal lies in a responsive regulatory environment, a deep talent pool, and an ecosystem that fosters innovation.
A year of renewed optimism
This year venture capital is primed for a year of renewed optimism, with transformative technologies, healthcare innovation, and green technologies leading the way. As AI continues to dominate, sectors like biotech and sustainable solutions are seeing increasing investments, driven by both global demand and evolving market dynamics. With this backdrop, 2025 could very well be the tipping point for a new era of investment-driven transformation.
As a leading fund administrator, Belasko have deep experience supporting VC managers. Our partnership-driven approach, under-pinned by leading technology, offers end-to-end fund administration solutions tailored to support your optimal operating model. Get in touch if you’d like to discuss how Belasko can support your journey: [email protected].
[Jersey, Channel Islands – 20 January, 2025] – Belasko is pleased to announce the appointment of Paul Nayar as Chief Financial & Operations Officer (CFOO), effective 2 January, 2025. Based in the Jersey office, Paul will play a pivotal role in driving Belasko’s strategic objectives and operational excellence.
Paul brings over 30 years’ experience in the international finance industry, with an extensive track record in senior leadership roles. Most recently, he served as Group Chief Financial Officer at Crestbridge Group, where he led the financial strategy that underpinned significant organic growth. His career also includes leadership positions at Zedra, Santander, and RBS International.
With a deep understanding of multi-jurisdictional businesses operating in dynamic global markets, Paul excels in shaping strategic agendas and delivering impactful results through a collaborative, client-focused approach.
Belasko’s CEO, Edward Green, expressed his enthusiasm for Paul’s appointment: “We are thrilled to welcome Paul to Belasko. His wealth of experience, strategic insight, and leadership capabilities make him an invaluable addition to our team. As we pursue ambitious financial, commercial, and operational goals for 2025 and beyond, Paul’s expertise will be instrumental in elevating our platform and delivering exceptional client service through our talented people.”
Paul Nayar also shared his excitement about joining Belasko: “I am delighted to join Belasko at such an exciting time in its journey. I look forward to collaborating with the team to build on the firm’s strong foundation and help drive its strategic vision.”
Paul’s appointment marks an exciting chapter for Belasko as the company continues to expand its footprint and innovate across its service offerings.
About Belasko
Belasko is a leading fund and fiduciary firm specialising in fund administration, corporate services, and private wealth solutions. Operating across multiple jurisdictions, Belasko delivers tailored, tech driven, high-quality services to global fund managers, high-net-worth individuals, families, and entrepreneurs.
For media inquiries, please contact: Alice Heald
Group Head of Marketing, Belasko [email protected]
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