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Cayman Top Hedge Fund Habitat - Property Market Bouyant too

Given the challenges faced by the hedge fund industry worldwide since 2008, with mass redemptions and fund liquidations, the number of hedge funds domiciled in the Cayman Islands has remained remarkably consistent. Of the mutual funds domiciled in the Cayman Islands, 8,720 of those are registered funds, according to Heather Smith, deputy head of investments and securities at Cayman Islands Monetary Authority (CIMA).

Given the challenges faced by the hedge fund industry worldwide since 2008, with mass redemptions and fund liquidations, the number of hedge funds domiciled in the Cayman Islands has remained remarkably consistent. Of the mutual funds domiciled in the Cayman Islands, 8,720 of those are registered funds, according to Heather Smith, deputy head of investments and securities at Cayman Islands Monetary Authority (CIMA). “Although CIMA doesn’t strip out the number of hedge funds specifically, the majority of those 8,720 registered funds are hedge funds,” she says. The total number of registered funds has dropped since 2008 from a peak of 9,640 in the third quarter. Still, the jurisdiction registered between 80 and 100 new funds a month throughout 2010. This is all the more impressive given the number of other external and internal challenges that the jurisdiction has faced since 2008. After the Cayman Islands had a budget deficit in 2009, there were fears that the British government would impose direct taxation over the British Overseas Territory. Other jurisdictions have risen to prominence, particularly in Europe, as new regulatory standards such as the Alternative Investment Fund Managers Directive have encouraged some funds to develop a presence there and distribute EU regulator-friendly products such as UCITS. If that wasn’t enough, some foreign governments, including the US, have seen offshore centers as part of the problem during the current downturn, rather than part of the solution. Yet the Cayman Islands have met these challenges, weathered the economic downturn of the last few years, and emerged with their reputation as the leading offshore jurisdiction for institutional hedge funds intact. Despite a number of challenges, the Cayman Islands are still the leading offshore jurisdiction for institutional hedge funds.

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