JERSEY Trends and Developments Contributed by: James Willmott, David Taylor, Guy Coltman and Katherine Tresca, Carey Olsen Jersey LLP
Carey Olsen Jersey LLP 47 Esplanade St Helier
Jersey JE1 0BD Channel Islands
Tel: +44 1534 888900 Fax: +44 1534 887755 Email: jerseyco@careyolsen.com Web: www.careyolsen.com
2025: Uncertainty as the New Normal The year 2025 started with a general sense of opti - mism for the private equity (PE) industry and the broader M&A market. PE investors had endured a challenging couple of years from 2023 when, follow - ing the giddy highs of the post-COVID PE investment bonanza of 2021 and 2022, soaring inflation, rising interest rates, macroeconomic uncertainty and geo - political upheaval put an end to the free-money-era party and lead to a rapid-onset hangover. Higher cost of capital, significant gaps in valuation expectations and balance sheet pressure led to a significant pull back in M&A activity. Global buyout deal value per quarter fell by roughly 65% from the peak of USD274 billion in Q3 2021 to the nadir of USD98 billion in Q2 of 2023, according to data from Bain & Company, with exit values plummeting by a similar amount. Distribu - tions to limited partners (LPs) started to lag, and hold periods for investments extended. By late 2024, however, falling inflation, interest rate cuts, increasingly positive economic data and a new “business-friendly” administration in the United States were all predicted to herald a new dawn: leverage would be cheaper, traditional exit paths would re- open and pent-up demand coupled with record levels of aging dry powder – and a backlog of unsold assets purchased at inflated (silly) multiples in the boom times – would spur activity. The end of 2024 and start of 2025 saw a steady and encouraging uptick in activ - ity as PE looked to emerge from one of its most chal - lenging periods since the global financial crisis, with buyout deal value sitting at USD182 billion in Q2 of 2024, up from USD98 billion in Q2 of 2023. And then: tariffs. A new aggressive trade policy from the White
House and the resulting macroeconomic and capital market uncertainty (read: chaos) made effective asset valuation and pricing of deals challenging, drove up borrowing costs and led many deals to be put on hold. Whilst tariff turbulence put paid to the idea that 2025 was to be the long-anticipated comeback year, PE activity has remained relatively resilient. Policy uncer - tainty and stubborn inflation have continued to weigh, but what is perhaps most notable is that PE invest - ment has, as of mid-2025, remained solid. The esti - mated global buyout value for Q2 2025 is USD158 billion, only slightly down from 2024 values and still far above the approximately USD100 billion per quarter that the 2023 low saw. Amid the constantly shifting market and geopolitical outlooks of the last few years, PE investors have been forced to adapt to uncertainty as the new normal, executing deals and continuing to raise funds in less-than-ideal environments whilst adopting new strategies to continue to deploy capital and generate liquidity for LPs. The trends in activity observed in Jersey have gener - ally mapped those observed in the global PE market – ie, activity = down. Against this market backdrop, however, Jersey has continued to be a jurisdiction of choice for the PE industry, with investors continuing to select the jurisdiction as a leading domicile for their fund vehicles, a flexible location for their acquisition structures and an attractive market for direct invest - ment. All of these trends are set to continue. Jersey funds Jersey has long been a leading domicile for private capital funds, a trend that has continued into 2025. As
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