Six Key Venture Capital Trends to Watch in 2025

Written by

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].

[1] https://www.thebusinessresearchcompany.com/report/venture-capital-investment-global-market-report

[2] https://pitchbook.com/news/articles/vc-outlook-fund-distributions-will-rebound-in-2025

[3] https://www.ey.com/en_ie/newsroom/2024/12/venture-capital-investment-in-generative-ai-almost-doubles-globally-in-2024-as-momentum-accelerates-in-transformative-sector

[4] https://www.cbinsights.com/research-unicorn-companies

[5] https://www.forbes.com/councils/forbesfinancecouncil/2024/11/19/five-critical-venture-capital-trends-to-watch-in-2025/

[6] https://pitchbook.com/news/articles/europes-soonicorns-who-will-reach-a-1b-valuation-in-2025

[7] https://pitchbook.com/news/articles/private-wealth-offers-lifeline-for-emerging-vcs

Belasko Appoints Paul Nayar as Chief Financial & Operations Officer

Written by

[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]

Belasko 2024: Year in Review

Written by

Belasko 2024: Year in Review

As the year draws to a close, our CEO Ed Green, takes a moment to reflect on Belasko’s performance and achievements in 2024.

I am pleased to report on a period of growth, innovation, and dedication across all areas of Belasko. Despite a challenging global environment, our achievements underscore the strength of our strategy, the commitment of our team, and the trust placed in us by our clients.

Strong financial performance

2024 has been another strong year for the business. We are finishing the year with significant revenue growth, reflecting a consistent double-digit compound annual growth rate (+25% over the past five years), supported by a robust operational presence across our four strategic European locations in the UK, Luxembourg, Jersey, and Guernsey. With growth being a key focus this year, we’re proud to have secured a number of significant new mandates joining the Belasko family.

As a business, we administer over $12 billion in assets reinforcing our position as a trusted partner for a global client base, backed by a dedicated workforce of over 120 talented professionals.

Continuing to build our technology and people platform

Belasko’s commitment to innovation and excellence remains at the forefront as we strengthen both our technological capabilities and our people-first approach.

This year, we launched our Belasko Client Portal, marking a transformative step in how clients access and manage their investments. The portal offers a seamless and secure digital experience, reaffirming our dedication to delivering cutting-edge solutions that simplify and enhance client interactions.

We’ve also made strategic investments in strengthening our team with notable hires in extending our fund accounting, technological innovation and marketing capabilities, bringing fresh perspectives and expertise to support our growth. These additions underline our focus on cultivating talent and ensuring that our workforce remains a driving force behind our success.

Moreover, we are proud to be advancing towards ISAE 3402 accreditation, a testament to our unwavering commitment to operational excellence, governance, and trust.

A people-first approach

At the heart of Belasko’s success is our people. This year, we’ve achieved a high retention rate of 84% highlighting that we continue to be a workplace where employees feel valued and supported.

The launch of our People & Culture Taskforce has further strengthened our internal community and has helped foster engagement, encourage collaboration across offices, and champion work-life balance initiatives. Among these was the STEPtember challenge where our teams logged an impressive 10.7 million steps – the equivalent of walking from London to Hong Kong! Beyond the numbers, it reinforced a spirit of camaraderie and promoted physical and mental well-being.

We’ve strived to continually support our team, enhancing employee benefits and introducing some additional initiatives aimed at improving work-life balance such as Flexi-Fridays and birthday holiday allowance.

Through our Belasko in Society initiative, we also focused on giving back. Partnering with Magic Breakfast, we raised funds equivalent to providing 285 weeks of breakfasts to a child or meals for 65 children for one month, supporting young learners in need.

Together, these efforts underscore Belasko’s dedication to being a people-first organisation.

Reaching new milestones

This year saw the opening of our London office, a significant step forward in our growth journey and a reflection of our ambition to grow alongside our clients.

Commitment to sustainability

Belasko’s commitment to sustainability remains a cornerstone of our operations. Our 2023 Sustainability Report, developed with Terra Instinct, highlighted key achievements, including maintaining low carbon emissions as part of our efforts to reduce our impact on the planet. With a workforce that is 49% female, we continue to champion diversity and inclusion while striving to minimise our environmental footprint.

Enhancing visibility in the market

Belasko’s presence and influence in the industry have grown significantly this year, thanks to strategic partnerships and active participation in key events and associations.

Our partnership with the BVCA has been a cornerstone of this strategy. By sponsoring three of their flagship events, including the Annual Summit and the Tax Policy Conference, we’ve positioned ourselves alongside leading voices in the private equity and venture capital space. This collaboration has provided invaluable opportunities to connect with industry leaders, showcase our expertise, and contribute to shaping discussions on critical topics impacting the sector.

We have actively engaged with local industry associations in Jersey, Guernsey, and Luxembourg, staying ahead of market trends and regulatory changes while strengthening our networks and sharing insights.

Belasko are also proud to have recently been awarded the Channel Islands Wealth Briefing Award for Client Lifecycle Management. This recognition reflects the success of our innovative approach to supporting clients through every stage of wealth creation, preservation, and transition.

Looking ahead to 2025

As we look to the future, I am excited about the opportunities that lie ahead. Our growth trajectory is hugely promising, and we are eager to expand our reach and capabilities while maintaining the high standards of service that define Belasko. Together, we will continue to build on our success, delivering exceptional value to our clients and stakeholders in 2025 and beyond.

Navigating the future: end of year reflections and expectations for the private capital markets in 2025

Written by

As 2024 comes to a close, the private capital fund industry stands as a cornerstone of the global economy, having grown exponentially over the past decade. Today, private markets account for a significant portion of global financial activity, and in 2025, their AUM is projected to reach up to $15 trillion[1].

This growth trajectory underscores the critical role private markets play in financing businesses, driving innovation, and generating returns for investors across the globe. The sector’s ability to raise and deploy capital efficiently, even amidst volatile market conditions, demonstrates its resilience. In 2024, despite macroeconomic challenges and geopolitical uncertainties, private capital provided essential liquidity and investment across a spectrum of opportunities, including secondary markets, private credit, and venture-backed start-ups.

However, regulatory reforms, ESG priorities, liquidity pressures, and geopolitical developments have redefined the operating environment. As we reflect on 2024, we see a year of transformation that has set the stage for private markets to adapt, innovate, and remain a vital force in the global economy heading into 2025.

A year of political turbulence

Leadership transitions

The political environment in 2024 was defined by seismic changes. In the UK, the Labour government’s ascent marked a shift toward fiscal tightening and tax reforms aimed at addressing public sector deficits. Across the Atlantic, Donald Trump’s re-election as U.S. President introduced uncertainties around trade and foreign policy. These leadership transitions underscore the interplay between politics and private markets, as fund managers and investors brace for policy decisions with global implications.

Goldman Sachs predicts that the U.S. administration’s proposed tariffs will weigh heavily on Eurozone growth, particularly as trade policy uncertainty disrupts cross-border flows[2]. Combined with the Labour government’s reformist agenda in the UK, private markets must remain vigilant and flexible as they navigate a time of change.

Carried interest: A new taxation era in the UK

Under the Labour government, the carried interest regime will transition from being taxed as capital gains to trading income, a move designed to align taxation norms with global benchmarks. The capital gains tax hike to 32% adds another layer of complexity, particularly for non-UK residents providing services to UK-based funds. The regime change will place the UK with one of the highest tax rates in respect of carried interest across the global and will require careful consideration by private capital managers.

Liquidity and fundraising: evolving strategies in challenging conditions

Challenges in fundraising

The fundraising environment remained difficult throughout 2024. The number of new funds dropped by 24% to 189 form the second quarter to the third quarter – but deals and exits are starting to show some stability[3] as we point toward 2025. Demand for credit funds, particularly those offering evergreen structures with predictable cash yield, have continued to grow, driven by investors seeking safe havens amid volatile equity markets.

Secondary markets and liquidity tools

Secondary markets gained unprecedented traction, supported by an expanding suite of liquidity platforms. The market now boasts over 25 platforms, enabling fund managers to provide enhanced liquidity options to investors. These tools are particularly valuable in navigating constrained capital conditions, offering fund managers greater flexibility while aligning with investors’ liquidity needs.

In the first half of 2024, GP-led transactions accounted for $31 billion, making up 43% of the total secondary market volume[4]. 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​.

Unlocking pension fund capital

Pension fund reforms remain a hot topic, particularly in the UK. Defined contribution (DC) schemes face structural barriers in allocating to private capital due to liquidity constraints and valuation complexities. However, innovative managers aligning their strategies with these requirements stand to unlock significant capital flows and solving these issues may be critical to maintaining the UK’s competitiveness in private markets.

Geopolitical spotlight: regional dynamics in private capital

All of the key European fund domiciles offers excellent coverage across all investment strategies however we have highlighted some of the key themes specific to each jurisdiction that we have observed this year.

Jersey: a gateway for global investment

Jersey’s reputation as a strategic hub for cross-border fund structuring continues to grow. The island has positioned itself as a key conduit for Asian investment into Europe, supported by strong regulatory frameworks and a global connectivity strategy. Jersey continues to apply a focus towards U.S. managers for launching funds aimed at European markets, underscoring its importance as a gateway jurisdiction.

In addition, investor demand for tokenisation is increasing as investors seek more control and transparency over their assets. Tokenisation allows for the fractionalisation of assets, enabling investors to access opportunities traditionally reserved for larger institutional players. In 2021, the sector stood at around US$1.9bn, growing to US$2.8bn in 2023 and US$3.45in 2024 so far. Aggregated, assets currently stand at around US$13bn with the expectation that the sector will rise into the trillions (USD) by 2030[5].

Guernsey: innovation for venture and buyouts strategies

Guernsey remains the premier jurisdiction for European venture capital (VC) funds, with twice as many funds raised in Guernsey during 2022-2023 as compared to the next most-popular jurisdiction[6]. Leveraging its broad diversity of experience and skills, whilst offering familiarity to managers and investors, Guernsey is an ideal jurisdiction for new managers looking to launch a first-time, spin-out or buyout venture fund. Its appeal lies in a responsive regulatory environment, a deep talent pool, and an ecosystem that fosters innovation. Similarly to Jersey, Guernsey recognises the role that tokenisation could play in improving efficiency with capital markets[7].

Luxembourg: growth through private debt

Luxembourg solidified its role as a hub for private debt funds in 2024, with credit sublines playing a pivotal role in optimising IRRs and portfolio management flexibility. As borrowing costs rise, fund managers are leveraging these facilities to balance NAV growth with capital efficiency. Looking ahead, private debt strategies remain critical, offering resilience in a high-rate environment.

ESG: A rebounding priority

Despite a cooling in ESG fundraising during 2023, 2024 has seen a resurgence globally, with $55 billion raised by April alone[8], signalling renewed investor interest. ESG strategies are increasingly viewed as a means of balancing returns with risk mitigation, given their lower performance variance compared to non-ESG funds.

With ESG AUM projected to reach $33.9 trillion globally by 2026[9], fund managers must continue integrating sustainable practices to attract investor capital and align with regulatory expectations.

Operational excellence: scaling for success

Fund managers face increasing pressure to scale their operations without sacrificing efficiency. Collaboration with third-party fund administrators has become essential, allowing managers to streamline compliance, reporting, and deal execution processes. This approach enables fund managers to focus on value creation while mitigating operational bottlenecks—a critical consideration for scaling venture and private equity funds.

This year, we released a whitepaper which addressed how outsourced models are changing.  Whilst managers face increasing pressures to enhance performance, reduce costs and manage risks effectively, we share how partnering with expert providers, like us, you can simplify administration solutions for your business. Read the whitepaper here.

A bearish outlook for 2025

While modest growth is expected for the private capital industry in 2025, the path ahead isn’t expected to be without challenge despite interest rate cuts, particularly in the U.K. and U.S., could provide much-needed relief to fund managers and investors. According to Goldman Sachs[10], the U.S. economy is expected to see a 2.5% growth in GDP, beating expectations. However, this positive growth is likely to be offset by geopolitical tensions, such as the ongoing effects of trade policy uncertainty linked to U.S.

Changes in tax regimes are likely to influence investor behaviour and could impact deal flow and fund strategies. This combined with global economic uncertainties, will require private capital fund managers to adjust quickly and embrace a more agile operational model.

For fund managers, adaptability will be key. Embracing technology, integrating ESG considerations, and refining operational models will position firms for success in an environment that demands innovation and resilience. As private capital markets evolve, opportunities will emerge for those who can navigate the complexities of 2025 with flexibility and foresight.

As a leading fund administrator, Belasko remains committed to supporting our clients in navigating any change or uncertainty that 2025 may bring, as well as offer tailored solutions to help fund managers thrive and avail of new opportunities on the horizon. To discuss in more detail, please reach out to Nick McHardy, our head of funds, at: [email protected].

[1] https://www.spglobal.com/en/research-insights/market-insights/private-markets

[2] https://www.goldmansachs.com/insights/goldman-sachs-research/macro-outlook-2025–tailwinds–probably–trump-tariffs

[3] https://www.preqin.com/insights/research/quarterly-updates/q3-2024-private-equity#:~:text=Q3%20proves%20we%20are%20in,and%20exits%20are%20showing%20stability.&text=Download%20PDF-,Q3%20proves%20we%20are%20in%20a%20more%20challenging%20fundraising%20environment,and%20exits%20are%20showing%20stability.

[4] https://www.blackrock.com/institutions/en-us/insights/market-update-h2-2024

[5] https://www.jerseyfinance.je/news/investor-demand-for-control-will-drive-tokenisation-agenda-but-education-and-collaboration-are-key/

[6] https://www.guernseyfinance.com/industry-resources/news/2024/venture-capital-trends-guernsey-takes-the-lead/

[7] https://www.guernseyfinance.com/industry-resources/news/2024/gfsc-policy-statement-approach-to-fund-tokenisation/

[8] https://www.preqin.com/esg/esg-in-alternatives

[9] https://www.pwc.com/gx/en/news-room/press-releases/2022/awm-revolution-2022-report.html

[10] https://www.goldmansachs.com/insights/goldman-sachs-research/2025-us-economic-outlook-new-policies-similar-path

Why Managers Should Consider Jersey for Their Next Fund

Written by

If you are considering setting up a private, closed-ended fund, Jersey offers a robust and attractive environment for fund managers. With over 60 years of experience, Jersey is a leading player in the global finance sector, providing a range of benefits for those looking to domicile their funds. This article explores why you should give Jersey serious consideration for your next private closed-ended fund and how partnering with experienced providers can support you with your fund’s growth and achieve your launch objectives.

Why choose Jersey for your next fund?

Jersey offers a highly attractive taxation environment for funds, which is a significant advantage for managers. There is no capital gains tax, and funds are typically not subject to Jersey income tax, provided they meet certain criteria. Additionally, there is no withholding tax on interest payments and distributions, and no stamp duty is levied on the transfer of shares. This favourable tax regime enhances the overall return on investment for fund managers and investors alike, making setting up a Jersey fund particularly appealing.

Funds domiciled in Jersey can be marketed into the European Economic Area (EEA) under the National Private Placement Regime (NPPR). This regime simplifies access to European investors without the complexities and significant costs associated with the EU’s Alternative Investment Fund Managers Directive (AIFMD). Additionally, Jersey offers unrestricted marketing into North America, the Middle East, and the Asia-Pacific (APAC) regions, providing easy and broad market access for fund managers.

Jersey is particularly known for its expertise in alternative investments, such as private equity, real estate, private credit and infrastructure. The Jersey fund industry has developed deep legal, tax, accounting, administration, and governance expertise to support these investments, making Jersey a preferred jurisdiction for fund managers specialising in alternatives.

As of the latest reports, Jersey’s funds industry manages an impressive £452 billion[1] in assets (as at March 2024). This substantial figure reflects the strength and capability of Jersey funds to support large and complex investment structures, and is a significant vote of confidence from managers, large or small.

The Jersey funds industry is internationally recognised for its strong legal and regulatory framework, which has been developed over decades to meet the needs of global investors. The recent Jersey MONEYVAL Mutual Evaluation report[2] highlights Jersey’s effectiveness in preventing financial crime, showcasing its commitment to high compliance standards and reinforcing the trust and security that investors seek.  The resultant ‘white-listing’ by the Financial Action Task Force (FATF), underscores its commitment to anti-money laundering and counter-terrorist financing. This robust reputation makes Jersey a secure choice for fund managers seeking a reliable and well-regulated domicile.

Collectively, these characteristics reinforce Jersey’s status as a leading finance centre.

Regulatory options in Jersey

One of the major advantages of setting up a Jersey fund is the flexibility of regulatory options available. Jersey’s regulatory regime is divided into three main categories:

  • Notification Only Fund: This option provides a middle ground with moderate regulatory oversight, suitable for certain types of investment strategies and where “Eligible Investor” criteria can be met.
  • Jersey Private Fund (JPF): Offers a faster route to market, ideal for managers who value speed to market or want to limit the number of offers and admitted investors and for Family Offices looking to manage inter-generational wealth succession.
  • Collective Investment Fund: A fully regulated option by the Jersey Financial Services Commission (JFSC) that allows for unrestricted marketing and no cap on investor numbers provided they meet the criteria for an “Expert Investor”.

These options give fund managers the flexibility to choose a regime that aligns with their specific needs and strategies, making Jersey a versatile choice for domiciling your next fund.

Delve a little deeper into the regulatory options in Jersey by checking out our regulatory options comparison (Jersey Regulatory Options Comparison).

Key considerations for fund managers

With Jersey presenting a wealth of benefits, there are some key considerations that fund managers should keep in mind to ensure a successful experience. Jersey has a comprehensive legal and regulatory environment that can accommodate differing needs of managers, including a range of legal entity options for their fund structure. By far the most common choice is a Limited Partnership and Jersey has adopted modern Limited Partnership legislation to meet the needs of private capital fund managers and their investors. This can accommodate a traditional limited partnership structure or Separate and/or Incorporated Limited Partnerships.  In addition, Jersey can offer Unit Trust vehicles and corporate entities, either limited liability or protected / incorporated cell companies.

Additionally, Jersey encourages investment management and oversight activities to be sufficiently supported by a suitable fund promoter. This collaborative approach not only ensures effective local management and control but also enhances the fund’s operational integrity. Developing close partnerships with Jersey service providers, will help facilitate smoother operations and stronger connections and many private capital fund managers might therefore seek an appointment to the board of the fund’s governing entity. Depending on the regulatory option chosen for your fund, this may require the pre-approval of the JFSC.

Cost will be a key factor in the decision of where to establish your next fund. Focusing on the specific needs of your fund, how many investors you are targeting, where they are based and what reporting requirements you want to be tied to will have material impact on the potential costs. Jersey offers the right balance of available expertise, balanced compliance and regulatory requirements and choice of partner to ensure that you can achieve the right value for money outcome.

By embracing these considerations, fund managers can strategically position themselves to leverage Jersey’s strengths and contribute to its continued growth as a leading fund jurisdiction.

Belasko in Jersey

Jersey offers a mix of regulatory flexibility, market access, and specialised expertise, making it an attractive jurisdiction for fund managers. However, managers should collaborate closely with legal counsel and local administrators, like Belasko, so you can leverage Jersey’s advantages and realise your objectives for your next fund.

We have a team of experts based in Jersey who provide responsive, accurate and consistent support to global fund managers. We offer a full-scope, tailored fund administration solution, designed to drive performance throughout the fund lifecycle. Our tech-enabled solution is built on processes and procedures, led by experienced teams, that free you up to focus on what you do best.

With a deep understanding of the Jersey regulatory landscape and strong relationships with local law firms and advisers, we’re ideally positioned to help 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 Jersey, please get in touch with Paul Lawrence at [email protected].

 

[1] https://www.jerseyfinance.je/jersey-the-finance-centre/sectors/funds/

[2] https://www.jerseyfsc.org/industry/international-co-operation/international-assessments/moneyval/2024-moneyval-evaluation/

Fund manager scale-ups: balancing growth with efficiency

Written by

Private capital fund managers, particularly in VC, often operate within a lean model which affords them dynamism and agility in pursuit of exceptional investment return. However, this can present challenges as they scale-up and grow.

It demands a strategic operational approach which will generally require taking a partnership approach with a third-party fund administrator to streamline processes and maintain robust control and oversight. Effective collaboration with fund administrators supports fund managers to focus on value creation, ensuring seamless deal execution, reporting, and compliance while avoiding operational bottlenecks.

This article aims to provide actionable insights for fund managers to effectively navigate the scale-up pathway and achieve growth without proportional cost expansion.

Integrate, don’t replicate

A streamlined relationship with your fund administrator can be transformative. This partnership hinges on integrating processes and responsibilities rather than duplicating efforts, ensuring efficiency and clarity at every stage:

  • A clear deal process: Establish a robust process for your deal cycle—from due diligence, deal execution through to facility drawdown, capital call issuance and deal settlement. Ensure the full end to end deal process is clear, well-documented and accepted and well understood by both your internal deal team and your administrator.
  • Structured communication: Support a transparent and structured communication framework. This ensures clarity on deliverables, pipeline activities, and priorities between your team and proactively driven by your administrator.
  • Reliance on controls: Develop/request an in-depth understanding of the controls performed by your fund administrator. This allows you to rely on their processes rather than re-performing tasks, saving time and reducing redundancy.

Oversight and control

Scaling doesn’t mean relinquishing control. Effective oversight ensures that operational standards and strategic goals are met as your fund grows:

  • Key Performance Indicators (KPIs): Agree on KPIs that reflect both parties’ expectations. Fund administrators should provide proactive reporting against these metrics to ensure alignment and accountability.
  • Proactive Deadline Management: Administrators should proactively highlight upcoming deadlines and critical workstreams, enabling fund managers to plan, scrutinise and respond effectively.

Leverage technology

In today’s tech-driven market, fund administrators invest significantly in advanced systems and reporting platforms, aiming to deliver cutting-edge tools that enhance efficiency, accuracy, and scalability. Fund managers can unlock substantial value by maximising the potential of these investments rather than duplicating efforts or maintaining costly third-party systems.

  • Utilising existing tools: fund administrators have spent significant time developing and refining their technology solutions, incorporating automation, data visualization, and compliance tools designed specifically for fund management needs. By leveraging these platforms, fund managers can:
    • Enhance reporting: Access real-time, detailed financial and operational reports tailored to their requirements, providing transparency and insights.
    • Streamline operations: Automate routine tasks such as NAV calculations, investor reporting, and compliance monitoring, reducing manual effort and minimising errors.
    • Ensure compliance: Rely on integrated systems designed to keep pace with evolving regulatory requirements, ensuring seamless adherence to global standards.
  • Collaborating on custom solutions: While standard platforms address most fund manager needs, unique challenges often arise during scaling. Engaging in open dialogue with your fund administrator allows for tailored adaptations or co-developed solutions.

By leveraging the administrator’s existing infrastructure, fund managers can achieve cost-effective innovations that align with their objectives, avoiding the expense and complexity of developing systems in-house.

The Belasko advantage

At Belasko, we understand the unique challenges fund managers face when scaling up. Our partnership-driven approach offers end-to-end fund administration solutions tailored to support your optimal operating model. By integrating our services into your operations, we help fund managers achieve growth without compromising on oversight, control, or efficiency.

If you’re looking to scale up effectively, contact Nick McHardy, Head of Funds ([email protected]), to learn how Belasko can support your journey.

Resilience and innovation in private markets amid economic shifts

Written by

What are the pressing issues and emerging trends across the private markets as we fast approach the end of the year?

At an event last week, Greg McKenzie, our Luxembourg Country Head, shares insights into the latest trends shaping the Luxembourg funds market and his observations of the sector’s strong resilience and its ability to innovate amid ongoing economic changes and uncertainty.

The Luxembourg market continues to lead in responding to challenges such as rising borrowing costs, real estate pressures, and evolving LP demands. In this article, he reveals how fund managers and investors are leveraging new strategies to navigate these hurdles while positioning themselves for growth in 2025.

Credit sublines: adapting to rising costs with strategic value

Credit sublines have cemented their role as a critical tool for fund managers, even as borrowing costs rise. These facilities help funds grow net asset value (NAV) without frequent capital calls, optimising internal rate of return (IRR) and providing greater flexibility in portfolio management.

Looking ahead, there is cautious optimism for 2025 as credit strategies remain vital despite rising borrowing costs. Fund managers are adapting by renegotiating terms, exploring alternative structures, and leveraging data to optimise cash flow and returns.

Credit lines continue to provide liquidity and flexibility, allowing managers to focus on long-term goals while delaying capital calls to enhance IRR metrics. Anticipated interest rate easing further bolsters confidence, positioning credit strategies for growth in a shifting market.

Fundraising and LP engagement: still tough times

The fundraising environment remains challenging, with institutional investors favouring established relationships over new partnerships. LPs are consolidating commitments with known GPs, reflecting a cautious approach in the face of ongoing economic uncertainty.

Another dynamic impacting the market is the retention of assets post-COVID. Many assets remain held within portfolios, delaying returns of capital to LPs and reducing their ability to redeploy into new opportunities.

Despite these challenges, LPs are shifting toward more global mandates, seeking to diversify their portfolios across broader geographies rather than sticking to regional allocations. This pivot is creating new opportunities for GPs to align their strategies with a more global investment thesis.

Real estate: navigating change and seizing opportunities

The real estate sector continues to face disruption, with letting issues in commercial real estate weighing on valuations and investor confidence. However, some challenges are also creating opportunities:

  • Fixed-term maturities: Assets with maturing fixed-term debt may push reluctant sellers into the market, creating potential for opportunistic buyers.
  • Closing the buyer-seller gap: The valuation mismatches seen post-COVID are narrowing, paving the way for increased transaction activity and exits.
  • Impact of rate drops: Anticipated reductions in interest rates could drive value increases across certain real estate assets, boosting market momentum.

Notably, credit within real estate is gaining clarity as a distinct allocation bucket for LPs, separating it from traditional real estate or equity classifications. This evolution is helping investors make more informed decisions about their portfolios.

Innovations in NAV lending

The NAV lending market is evolving rapidly, with new structures and strategies enhancing its appeal. Traditional SPV lines remain prevalent, offering mechanisms for funds and lenders to manage default events effectively.

Segmentation is also becoming more pronounced, with lenders aligning their expertise to specific asset classes, such as buyouts, private equity, infrastructure, and credit. This targeted approach is improving due diligence and aligning financing strategies with sector-specific risks.

In addition, a more entrepreneurial attitude is emerging in fund lending. High-net-worth individuals (HNWIs) are increasingly being engaged as part of broader investor pools, signalling a shift toward diversification in funding sources.

Looking ahead: optimism for 2025

Despite a tough fundraising environment and ongoing pressures in real estate, there is cautious optimism for 2025. Anticipated rate reductions, narrowing valuation gaps, and the ongoing evolution of credit strategies are likely to drive momentum across private markets.

With approximately 90% of funds now using call facilities, the Luxembourg market is maturing and adapting to a more complex environment. The industry is seeing increased competition and participation, underscoring the importance of robust due diligence and innovative approaches to capital deployment.

As private markets continue to evolve, collaboration between fund managers, LPs, and lenders will be key to navigating the challenges and seizing the opportunities that lie ahead.

For more insights or to discuss these topics further, please get in touch with Greg McKenzie ([email protected]).

Adapting to Change: Key Policy Developments Shaping Private Markets

Written by

The UK funds industry is at a pivotal moment. Over recent years, it has faced a challenging environment shaped by economic headwinds, political shifts, and heightened regulatory scrutiny. The introduction of a new government and a president in the United States marks a time of change, where policy decisions on both sides of the Atlantic will inevitably influence the private markets landscape.

At the same time, private markets are contending with complex global challenges—from tax reforms and sustainability mandates to evolving valuation and reporting standards. These changes are poised to redefine how fund managers operate, interact with investors, and deliver returns.

As the UK seeks to maintain its position as a global hub for private capital, managers are navigating a delicate balance: responding to regulatory demands while preserving competitiveness in a rapidly evolving market. This article delves into the latest policy and regulatory developments, offering insights on their implications and how private market participants can prepare for the road ahead.

Carried interest: Changes in the UK tax landscape

The UK’s carried interest regime is set for significant change following the Autumn Budget. Rachel Reeves, under the new Labour government, outlined sweeping tax reforms aimed at addressing fiscal challenges and aligning the UK with global taxation norms. These measures mark a decisive shift in policy and are expected to have far-reaching implications for private markets.

  1. Capital Gains Tax increase: Effective from April 6, 2025, the Capital Gains Tax (CGT) rate on carried interest will rise from 28% to 32%. This move places the UK among the highest-taxed jurisdictions for carried interest, on par with France and New York.
  1. Shift to trading income: In a dramatic overhaul of the current framework, carried interest will be treated as trading income rather than capital gains, fundamentally changing its taxation basis.

Additional measures include the extension of Income-Based Carried Interest (IBCI) rules to employees alongside LLP members and the introduction of taxes on non-UK residents’ carry related to UK-based services, subject to double tax treaties.

These reforms, while aimed at addressing perceived inequities in the taxation of private capital, risk diminishing the UK’s competitive edge unless counterbalanced by broader incentives or strategic industry support. Private markets participants will need to act swiftly to navigate this evolving landscape and mitigate the potential disruption caused by these policy shifts.

Key tax risks in due diligence for private equity investments

Tax due diligence is a critical component of private equity transactions, ensuring compliance, mitigating risks, and preserving value throughout the investment lifecycle. Private equity managers must prioritise four key areas where tax risks often arise:

  • Restructuring: Many private equity investments require significant restructuring to streamline operations, improve efficiency, or position the business for growth.
  • Refinancing: Leveraging debt is a common strategy in private equity transactions, but refinancing activities can give rise to tax concerns. Thorough tax analysis helps structure debt efficiently while mitigating regulatory exposure.
  • Tax action plans: During due diligence, managers often uncover tax risks at purchase. Developing and executing a robust tax action plan ensures identified risks are addressed proactively. This safeguards the investment and builds confidence among stakeholders.
  • Management Incentive Plans (MIPs): MIPs are vital for aligning the interests of management teams with investors, but they also present complex tax challenges. MIPs and employee loans require extra scrutiny to ensure compliance and avoid adverse tax consequences.

Private equity owned businesses often face distinct tax challenges due to their ownership structure. Additionally, insurers may exclude certain risks from coverage, necessitating proactive strategies to address these gaps well in advance of a sale process.

By focusing on these areas and implementing robust tax governance frameworks, private equity managers can navigate risks effectively, better protecting their investments.

Unlocking UK defined contribution pension capital

Private capital structures often clash with the liquidity needs of UK defined contribution (DC) pension schemes. While government and industry are seeking solutions, hurdles remain in areas like liquidity, valuations, and the treatment of carried interest. For managers able to align with these needs, the opportunity to unlock significant capital flows is immense.

AIFMD II and UK-EU divergence

The EU’s AIFMD II introduces stricter rules, including higher regulatory capital requirements, tighter delegation standards, and limitations on non-core activities. These changes aim to enhance transparency and investor protection but may increase costs and operational burdens, particularly for smaller managers.

In contrast, the UK is charting a more flexible path, focusing on competitiveness. Proposed measures include raising the €500m small AIFM threshold and avoiding sharp increases in regulatory capital requirements. This divergence seeks to attract global fund managers by fostering innovation and reducing compliance barriers.

For fund managers operating across jurisdictions, dual compliance will add complexity, but the UK’s approach may position it as a more attractive destination for private capital, offering a competitive edge in the global market.

The FCA agenda

The FCA is intensifying its focus on how private capital managers approach asset valuations, with a live consultation concluding in Q1 2025. Independence is becoming a cornerstone of valuation practices, with portfolio monitoring teams playing a more prominent role in scrutiny alongside formal governance processes.

The FCA also emphasise speed, clarity, and certainty to build confidence in private markets. Key initiatives include expanding access to capital, fostering diversity, and enhancing data-driven regulation, particularly in ESG.

Regulatory reporting changes 

ILPA’s updated quarterly reporting templates, effective January 1, 2026, aim to improve transparency, particularly around leverage and debt, providing investors with deeper insight into portfolio risks. However, feedback from the BVCA highlights that these templates may not be suitable for all investment strategies, especially those with complex structures or heavy debt exposure.

Fund managers will need to adapt their reporting processes to meet these new standards while maintaining flexibility for unique strategies. Collaborating with service providers will be key to ensuring efficient, compliant reporting that meets regulatory demands and supports investor confidence through enhanced transparency.

Retailisation of private markets

The push to retailise private markets, driven by ELTIF reforms, offers fund managers access to a vast new capital pool, particularly through defined contribution (DC) pension schemes. However, this shift comes with challenges including liquidity management and enhanced transparency in valuations.

While opening private markets to retail investors could drive significant growth, fund managers must adapt operationally to handle increased reporting, investor communication, and governance. Successfully navigating these challenges will position managers to benefit from a democratised private markets landscape for long-term growth.

Thriving amidst regulatory and market shifts

The UK’s private markets face a dual challenge: balancing regulatory demands with global competitiveness. The interplay between tax changes, evolving valuation standards, ESG mandates, and expanded reporting requirements demands a proactive approach. Managers that adapt swiftly will position themselves to thrive amidst this dynamic regulatory environment.

For tailored insights into navigating these changes, get in touch with Nick McHardy, Head of Funds ([email protected]) or Ross Youngs, CCO ([email protected]).

     

Considering Guernsey for your next private capital fund

Written by

Guernsey is well known as a premier host jurisdiction for the administration of private capital funds, offering a host of advantages that make it an attractive domicile for fund managers and investors alike. In this article, Hannah Dunnell (Guernsey Managing Director) explores the appeal of Guernsey as an alternative’s destination, typical fund structures the regulatory regime and how the use of a trusted third-party partner can complement the journey.

Why choose Guernsey as a fund destination?

Guernsey’s reputation as a leading financial centre is well established, with decades of experience in the international finance sector. The island’s robust tax, legal and regulatory framework, combined with its innovative approach to financial services, has made it a preferred location for alternative investment funds that ensures investor protection and stability. With track record and experience in hosting a wide variety of international alternative funds, both Guernsey and Belasko boast decades of experience in the real estate, venture capital and private equity sectors.

Guernsey funds benefit from unrestricted marketing into North America, the Middle East, and the Asia-Pacific region. Within Europe, Guernsey-based funds can access the European Economic Area (EEA) through the National Private Placement Regime (NPPR). With a total net asset value of Guernsey Funds at nearly £286 billion[1], Guernsey has built a solid reputation for private capital fund administration.

The total net asset value of Guernsey funds at the end of the quarter was £295.7 billion, an increase over the quarter of £3.2 billion (+1.1%).  Over the past year, total net asset values have increased by £9.7 billon (+3.4%).

Whilst Guernsey has traditionally been the home of the alternatives administration sector and continues to service a large proportion of the world’s top alternatives houses, Guernsey has emerged as a top-class destination to new managers looking to launch a first, spin out or buy out venture, leveraging the broad diversity of experience and skills available in the island whilst offering familiarity to managers and investors alike. With an innovative, responsive and engaged regulator and industry, Guernsey remains the ideal destination for alternatives.

Typical fund structure

Fund managers have a plethora of options to choose from in Guernsey to suit their specific structuring needs, below we explore some of the most commonly utilised structures:

Limited Partnerships

Whilst Guernsey offers the ability to establish both incorporated (creating separate legal personality for the partnership), and unincorporated limited partnerships under the Limited Partnerships (Guernsey) Law of 1995, non-Guernsey partnerships are often administered from Guernsey.

Non-Guernsey partnerships, such as English or Scottish partnerships are often utilised to take advantage of the benefits of the law under which they are established, but which form part of a larger fund structure to facilitate say, carry allocations or co-investment opportunities.

Commonly referred to as a GP / LP structure, a limited partnership will appoint a general partner who manages its affairs, with a separate Investment Manager or Advisor often being appointed by the general partner. Typically, the general partner will be a Guernsey company, which can accept appointments from multiple partnerships, and which will often bring any non-Guernsey partnerships into tax residence in Guernsey by way of management and control being exercised in Guernsey. The rate of corporate tax in Guernsey for entities with no physical presence is currently set at 0%, notwithstanding any bodies that form part of a larger group that may be subject to Pillar II legislation.

Company and Trusts

Guernsey companies and trusts are widely utilised as ancillary vehicles in a larger fund structure for management and control purposes or as special purpose vehicles to facilitate asset ownership, financing or provision of management incentive plans. strategies. The use of Protected and Incorporated Cell Companies has become increasingly popular as an alternative to a more traditional GP / LP fund, allowing asset and investor segregation, without the need for additional vehicles that often add cost and complexity to a structure.

Guernsey law has its roots in common law and offers both practical ease and flexibility across all aspects of its framework.

Regulatory Categories and Fund Types in Guernsey

Most fund structures will require some sort of regulation, and Guernsey offers a flexible regulatory environment tailored to meet the diverse needs of the alternatives industry. If meeting the definition of a Collective Investment Vehicle (CIV), ie a diversification of both investments / assets and investors, then direct regulation will be required; if the definition of a CIV is not met then what is referred to as a ‘Fiduciary Exemption’ may be required to be obtained. Should your structure not require regulation, or require a ‘Fiduciary Exemption’, a GFSC regulated corporate service provider will be required to provide services to your structure.

The regulatory regime for closed-ended funds is divided into three primary categories: private investment funds (PIFs) registered funds (RCIS) and authorised funds (ACIS).

PIFs and registered funds offer the fastest route to market in Guernsey, with the local administrator (often referred to as the Designated Administrator) undertaking to the regulator that the fund promoter meets the criteria for licensing, known locally as the fit and proper test. The reliance by the regulator on the Designated Administrator to perform such checks, allows the utilisation of what is known as the ‘fast track’ regime, allowing achievement of regulatory status in as little as three days.

Subject to meeting the specific route 1, 2 or 3 criteria, PIFs also offer a convenient way to expedite timetable to market and offer a ‘light touch’ regulatory regime on the basis that the investor base does not contain retail investors, only those who are considered professional or institutional investors.

In contrast, authorised funds undergo a more rigorous review process. These funds receive their authorisation directly from the GFSC after a substantive suitability review. This category provides an additional layer of investor protection and may be preferred by managers looking to attract institutional investors.

Onshore and offshore counsel and advisors are typically appointed to advise on constitutional documents (e.g. LPA, Side Letters), marketing and wider tax considerations (i.e. fund formation), as well as on local regulatory compliance and supporting tax considerations.

Belasko in Guernsey

Guernsey offers a compelling combination of regulatory flexibility, robust infrastructure, and global market access, making it an attractive destination for private capital funds. By understanding the available fund structures and regulatory categories fund managers can make an informed decision about whether Guernsey is the right domicile for their first or next fund. Engaging in early discussions with advisors is crucial in navigating this process.

Our group headquarters are based in Guernsey, and our team on the ground have extensive experience in servicing global fund managers. We provide tailored end-to-end fund administration and corporate services that seamlessly support you with streamlining your back-office operations.

With a deep understanding of the Guernsey regulatory landscape and strong relationships with local law firms and advisors, 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 Guernsey, please get in touch with Hannah Dunnell (Managing Director) at: [email protected]

[1] GFSC Statistics at the end of Second Quarter 2024, https://www.gfsc.gg/industry-sectors/investment/statistics

Proud to be sponsoring the BVCA Tax Policy conference 2024

Written by

Belasko is proud to sponsor the BVCA Tax Policy Conference on Tuesday 19 November in London. This is a key event in the funds diary, attracting senior tax, legal, and regulatory experts from the private equity and venture capital sectors. The conference will delve into the latest developments and policies shaping the private markets industry, providing essential updates on UK and international tax law, legal frameworks, and regulations that impact fund structuring, transactions, and compliance.

Topics covered will include:

– The latest UK tax policies affecting private markets
– Cross-border tax and regulatory challenges
– Evolving legal frameworks for fund management and investment structures
– Compliance updates and best practices

Our team attending are:

([email protected])
([email protected])
([email protected])
([email protected])
([email protected])
([email protected])

We look forward to engaging with industry peers. If you’re attending, get in touch to meet with our team, or visit us at our stand at the event.

Learn more about the conference here: https://www.bvca.co.uk/Calendar/Event-Details/DateId/2712.