A Transitional Moment for Jersey’s Funds Industry

Exactly a year ago this month, the Jersey Financial Services Commission (JFSC) introduced updated guidance on the tokenisation of real-world assets – a move that was warmly welcomed by Jersey’s funds industry.

Over the past year, it’s been pleasing to see industry embrace the opportunities presented by the tokenisation of virtual assets and bring a growing number of tokenised solutions to market. It’s important, because it is no exaggeration to say that the tokenisation of real-world assets is set to revolutionise the alternative funds sector in the coming years.

Already we have seen impressive growth in this space – the AUM of tokenised assets globally, for instance, stood at US$5.2bn in 2022, rising to US$8.5bn in 2023. In 2024, that figure almost doubled to US$15.7bn, and in 2025 has jumped further, increasing to US$25.3bn (as at August 2025, RWA.XYZ). The clear expectation is that the sector will continue to rise, and into the trillions by 2030.

We have, of course, seen shifts within the cross-border funds space before – from greater access to stock markets and unit trusts to, more recently, exchange traded funds and passive investments. The rise of tokenisation – although a natural evolution within the investment space – is significant and sets the scene for a seismic shift in the industry.

Against that backdrop, Jersey has maintained momentum over the first half of 2025, setting out its stall both as an attractive centre for tokenisation and as an IFC that is focused on innovation more widely.

Investor dynamic

Investor dynamics have been, and will continue to be, a key force in driving forward evolution in this space.

It’s a theme that is explored in a report published earlier this year by Jersey Finance, which set out how a number of largely unrelated factors are coming together to create a period of intense change – change that is manifested through investor, product and structural diversification.

At the heart of this change is the premise that asset raising is no longer as straightforward as it once was. This environment has prompted many managers to diversify away from their traditional institutional investor base and look to new audiences – including family offices and the broader high-net worth market.

Acceleration in the creation of new products and adoption of new structures – including through the concept of tokenisation – is enabling managers to cast their net wider, and investors to access new opportunities.

At a structuring level, this all means a move from standard fund vehicles towards more innovative non-traditional entities, including corporate structures. According to recent research from IFI Global, for example, just over half of managers (55%) are now using ‘traditional’ pooled investment funds, with the majority (82%) using partnerships, as well as managed accounts (32%) and co-investment vehicles (27%). Almost one in ten now use ‘funds of one’ (9%).

This is mirrored in Jersey, with a shift away from ‘traditional’ collective investment funds being more than compensated for by a significant increase in assets under management and the number of ‘funds of one’ and smaller co-mingled funds that are structured in corporate vehicles.

This is highlighted by record number of limited partnerships created in Jersey over recent years, whilst we’ve also seen a sustained rise in the use of Jersey Private Funds (JPFs) for sophisticated investors. Significantly in Jersey, tokenised structures are treated from a regulatory perspective as securitisation vehicles, and not funds.

It points to a critical industry truth – that investors want more control over their capital and investments. And control is something that tokenisation plays incredibly well to, giving investors access to more diverse investment opportunities and managing them directly and easily.

The good news is that Jersey has acted on this so that is ahead of the curve. As a funds centre, Jersey has listened carefully to the new generation of investor decision maker; a generation who are digital natives, and who are not only comfortable with virtual systems, but are demanding them.

With that in mind, we remain focused on creating the right ecosystem and providing the regulatory clarity needed to ensure the smooth establishment, management, banking and ongoing servicing of tokenised solutions.

Our expectation is that this trend will be sustained in the rapidly evolving stablecoin space too –again, an area where Jersey is well placed, with an ability to pass yield to stablecoin holders.

Innovative mindset

In the years ahead, we are likely to see a coming together of the worlds of tokenisation and traditional finance, with asset managers looking to bring traditional investment products ‘on chain’, in order to offer investors exposure to new opportunities.

That’s why it is important that Jersey’s funds sector continues to adopt an innovative mindset, to create a holistic and attractive alternative funds ecosystem.

The enhancements to the JPF announced just last month are a case in point, bringing the already popular JPF product for sophisticated investors into this new era – notably by removing the 50 investors/offers cap, enabling 24-hour JPF authorisation and streamlining the ‘sophisticated investor’ definitions.

It’s a reflection of the ambition Jersey has to create a progressive framework that provides future-proof solutions for a new generation of investors.

This is a transitional moment for Jersey’s funds industry and, thanks to our focus on innovation, including through the integration of tokenisation, we are well placed to see across the alternative fund space, including private equity and real estate. That’s where the real cost efficiencies, accessibility and transformational associated benefits of tokenisation will be seen.

this article originally featured in Business Brief.