Jersey Private Funds: Efficiency Without Assurance? Why Directors Must Think Twice
As one of the Channel Islands’ leading audit and assurance specialists, Baker Tilly Channel Islands works closely with fund boards across the sector - and we understand the pressures you face balancing client demands, investor expectations, and evolving regulation.
The New Regime: Fast, Flexible, but is it Riskier?
From 6 August 2025, Jersey’s updated Jersey Private Fund (JPF) regime will deliver exactly what fund promoters want: speed, flexibility, and a lighter regulatory burden. The “50 investor cap” is gone, the definition of professional investor is widened, and fully compliant applications can be fast-tracked within 24 hours.
What hasn’t changed is the continued exemption from the requirement to provide audit accounts, unless demanded by the constitutional documents or specific jurisdictions like the EU under AIFMD.
On the surface, this looks like a further victory for efficiency. But beneath it lies a governance challenge that Directors cannot ignore.
No Audit? The Spotlight Turns to You
With no audit, the burden of responsibility falls squarely on the shoulders of JPF Directors. Annual financial statements will still need to be signed and circulated to investors - but without independent assurance.
And here’s the uncomfortable truth: without an audit you may be missing out on a rigorous, independent challenge, which is designed to show the truth and fairness of the financial statements which you are responsible for.
As custodians of investor capital, Directors have a fiduciary duty to ensure that financial reporting is fair, accurate, timely and based on sound judgement. This role cannot be appropriately executed when treated as a secondary responsibility or a ‘corner desk job.’
- Do you sufficiently understand and are able to challenge complex valuation models? We have recently discussed the importance of challenge in governance and investment valuation, The Crucial Role of Challenge in Governance and Investment Valuation.
- Have you ensured there are no underlying issues without a detailed check?
So, the question every Director must ask themselves is simple: am I confident enough in these accounts to sign my name to them without external review?
Why External Assurance Still Matters
Directors cannot afford to see audits as a regulatory tick-box that has now been conveniently removed. They should see them as a governance mechanism.
An audit, or even a lighter form of assurance, provides:
- Confidence in the numbers – Independent verification that gives stakeholders the certainty they need.
- Investor trust – Many sophisticated investors will expect assurance, regardless of whether the law mandates it. Meeting that expectation strengthens credibility.
- Future readiness – Whether for capital raises, onboarding institutional investors, or preparing for an exit, audited or reviewed accounts make transitions smoother and faster.
Practical Steps for Directors
If you are a Director of a JPF, now is the moment to re-assess your approach to financial reporting:
- Review constitutional documents: Do they allow for or require assurance at certain thresholds? If not, should they?
- Engage with investors: Understand what they expect—not just today, but as the fund evolves.
- Consider phased assurance: Starting with lighter review engagements or agreed-upon procedures, and scaling to full audits as the fund grows. There are different levels of assurance which can be considered.
The Bottom Line
Not having an audit will not made life easier for Directors; it has made it riskier. Signing financial statements without independent assurance is not just a regulatory exercise; it is a personal statement of confidence in the numbers.
Efficiency may win headlines, but governance wins trust. And in the private funds’ world, trust is the currency that secures capital, confidence, and long-term success.
Related content
