Hedge Funds In The Cayman Islands

Spencer J. Privett is based at Maples & Calder's Asia Practice, in Hong Kong

The Cayman Islands make up the world's fifth largest financial centre. There are approximately 580 lincensed banks and trust companies in the Cayman Islands with assets of around US$747.6 billion. Forty-seven of the world's fifty leading banks have a presence in the Cayman Islands.

The Cayman Islands is one of the leading offshore jurisdictions for funds with over 3,600 regulated mutual funds. There are also a significant number of unregulated funds in the Cayman Islands which fall under available exemptions. In the last few years, the Cayman Islands have emerged as the jurisdiction of choice for many hedge fund managers. In fact, it has been estimated that over 80 per cent. of all new offshore hedge funds are domiciled in the Cayman Islands. Why are the Islands such an attractive jurisdiction?