As we reach the half-way point of 2025, the investment environment in the US market continues to evolve, set against a tumultuous backdrop that shows no signs of abating.
Continued tariff-driven uncertainty, coupled with increasing conflicts across the globe, are resulting in persistent volatility, while rapid technological innovation is also making its mark.
Consequently, it is no surprise that US investors are seeking greater diversification in a bid to offset such instability. They are placing greater emphasis on inflation protection and stable returns, with alternative investments—private equity, private credit, real assets and digital assets in particular— becoming central to strategies.
The message that's emerging is clear; for US-based asset managers, family offices and institutional investors, alternative investments are no longer peripheral – they are essential tools for resilience and growth in an increasingly complex global economy.
Reshaping international operations
For now, the challenges of the current macroeconomic environment look set to persist.
The potential implications of the Build Back Better (BBB) framework – particularly its influence on US fiscal policy – raise concerns about the long-term strength of the dollar's status as the global reserve currency. Any weakening of this status could have ripple effects on global capital market liquidity and cross-border investment flows, ultimately prompting managers to re-evaluate risk exposure and strategic allocations.
Meanwhile, rising geopolitical tensions – from the US and Europe to the Middle East and Asia – and an increasingly fragmented global trade environment are fundamentally re-shaping capital flows and influencing fund structuring decisions, with tariffs and trade disputes not only altering supply chains but also impacting the returns and tax efficiency of cross-border investments.
As a result, compliance, tax optimisation and risk management are all being scrutinised in a bid to protect margins and investor returns.
Reducing barriers
Although the broader economic outlook may seem bleak at first glance, significant opportunities remain on the horizon.
Technological advancements, in particular, are playing a transformative role in how alternative investments are accessed and managed.
Blockchain, tokenisation and the rise of digital assets are opening new doors for operational efficiency and investor inclusivity, with these innovations reducing barriers to entry, enhancing transparency and enabling fractional ownership, significantly changing the investment experience.
This is no fleeting trend; a recent Calastone survey showed that 67% of US managers plan to offer tokenised products within the next 12 months, with another 22% following within three years.
It is clear that tokenisation is set to become a core component of investment portfolios. With supportive regulatory frameworks already being proposed, widespread adoption is likely to follow – meaning jurisdictions that wish to remain competitive must be prepared to adapt.
Staying ahead
For Jersey, being adaptable and forward-thinking has long been part of our international finance centre's DNA – and those qualities are critical in serving the needs of US investors and asset managers, now more than ever.
As a jurisdiction, our Island has a strong track record in digital innovation, from regulating the world's first bitcoin fund in 2014 and having the foresight to rollout fibre connectivity to every office and household in Jersey, so that today the Island boasts the second fastest broadband speed globally, to applying anti-money laundering (AML) controls for virtual asset exchanges in 2016 and issuing guidance on initial coin offerings (ICO) in 2018.
This was followed last year with the publication of further guidance by Jersey's regulator—Jersey Financial Services Commission—on tokenising real-world assets and an update to the ICO rules.
Also, Jersey recently enhanced its Limited Partnership (LP) and Limited Liability Company (LLC) regimes, with the latter holding particular appeal for US managers. Meanwhile, the Jersey Private Fund (JPF) – offering professional investors an efficient access route to market – is increasingly in demand having grown more than 170% in five years.
It is worth adding that for tokenisation, Jersey applies its established securitisation framework, offering streamlined customer due diligence (CDD) requirements, no limits on note holders and a unique regulator-issued consent confirming compliance.
Such structuring optionality not only enables access to new investor segments but also offers flexibility in adapting to the evolving regulatory and technological landscape – imperative for any international finance centre wishing to position itself as a leader in this digital shift.
Looking ahead
The second half of 2025 looks likely to bring with it continued uncertainty – but there are opportunities for those prepared to adapt.
As market dynamics shift, successful managers will be those who embrace change, re-evaluate traditional models and harness innovation to create resilient, future-ready portfolios, with alternative investments set to play a central role.
In this environment, regulatory agility and a strong digital infrastructure will be critical to success. US managers looking to launch digital asset funds or explore tokenised investment vehicles will increasingly seek jurisdictions that offer a supportive, forward-thinking ecosystem. These are areas that look set to continue to dominate and shape the US financial services arena, and where Jersey continues to demonstrate proven leadership and capability.
Get more insight by downloading Jersey Finance's latest report, published in partnership with IFI Global: Trends in Alternative Investing.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
