Why the Channel Islands are well positioned to support flexible private capital structures
Private markets continue to evolve as institutional investors seek greater control, transparency and efficiency in how capital is deployed. One result has been the growing use of co-investment vehicles and separately managed accounts (SMAs).
These structures are used by institutional investors, sovereign wealth funds, pension funds and family offices to gain greater visibility over individual transactions and, in some cases, improve fee efficiency and portfolio alignment.
As demand grows, jurisdictions able to provide regulatory certainty, structuring flexibility and experienced service providers have become increasingly relevant. The Channel Islands have long been used as a domicile for private capital structures and remain well placed to support them, with Guernsey continuing to play an important role within that landscape.
A structural shift in private markets
The growth of co-investments and SMAs reflects a broader shift in the relationship between fund managers and institutional investors. As allocations have grown and LP-GP relationships have matured, bespoke structures have become more commercially viable for a wider range of institutional investors.
Traditionally, investors committed capital to blind-pool funds where investment decisions were made by the general partner. While this model remains central to private markets, some investors now seek additional structures that offer greater transparency around individual transactions.
Co-investment arrangements allow limited partners to invest alongside a fund in specific deals, often on different fee terms from the main fund. This can increase exposure to particular investments and may affect overall fee outcomes.
Separately managed accounts take this further by giving investors a dedicated mandate. These mandates can be structured to reflect specific preferences around sector exposure, geography, asset class and risk profile.
For managers, co-investment capital can also support larger transactions and allow investors to increase their exposure to selected opportunities.
Why the Channel Islands are well positioned
The flexibility required to support co-investment vehicles and SMAs makes jurisdictional choice important. Structures may need to be established quickly, accommodate different investor requirements and operate alongside existing fund vehicles.
The Channel Islands have a long-established funds industry and are frequently used for private capital structures.
Their regulatory frameworks are overseen by the relevant regulators in each island and combine investor protection with regimes designed for investment funds.
The islands offer a range of legal structures, including limited partnerships, companies and unit trusts. These can be used to accommodate different investment strategies and investor arrangements.
They also have an established professional services sector supporting private capital managers.
The role of specialist administration
Co-investment programmes and SMAs can introduce additional operational complexity. Administrators may be required to support multiple vehicles, different investor groups and demanding transaction timelines alongside traditional fund structures.
Specialist administrators therefore play an important role in supporting these arrangements, particularly where managers operate multi-vehicle investment platforms.
Langham Hall provides administration services to private market funds and investment managers. The firm works with private equity, real estate and private debt structures, including co-investment vehicles and SMAs.
Looking ahead
As investors continue to seek tailored investment exposure alongside traditional fund commitments, jurisdictions that can support a range of structuring options are likely to remain relevant.
The Channel Islands’ legal frameworks, established funds industry and professional services ecosystem mean they are likely to remain important to these structures. As these models become more common, the ability to administer them with precision, responsiveness and technical depth will matter just as much as the jurisdiction in which they are established.
