Restructuring A Cayman Islands’ Fund Board

Background

The vast majority of offshore hedge funds are registered in the Cayman Islands. In recent years the hedge fund industry has seen a continuous shift from high net worth individual investors to institutional investors, and these types of investors are set to increase their allocations to this sector of the investment management industry. It is a change that has brought forth a more demanding agenda for fund governance and oversight, catalysed by the recent controversial industry misconduct rulings such as Weavering, and there has been much revelation of poor and inadequate fund governance drawing public attention to the subject of board governance. Cayman Island 'jumbo directors', 'Walmart model' and 'high volume, low touch' governance approaches have forced the industry stakeholders to rethink fund governance 'legacy' practises.