Offshore hedge fund jurisdiction Cayman Islands expects to register 1,200 new open-ended funds in 2010.
This is the same figure as in 2009, bringing the total the number of Cayman hedge funds back to the pre-crash level of 9,589.
While there have been speculations in the international mainstream press that Cayman is going to fail because the EU is going to rise, members of a recent Opalesque Cayman Roundtable claim Europe’s success does not have to mean Cayman’s failure, as the products and regulations are seen as complimentary.
If hedge fund managers explore or set up European offerings, it is usually complimentary to their existing fund offerings rather than as a substitute for Cayman Islands funds.
In fact, a minimal number of funds have left Cayman for an European jurisdiction. As of September, only four funds have moved to Luxembourg and two to Malta.
Figures from law firm Maples and Calder show that the vast majority of funds formed in 2010 have at least one independent director and over 60 per cent have two independent directors.
About 25 per cent have more than one prime broker at launch.
Less than half of funds still charge two per cent management, but over three-quarters are in the range of one per cent to two per cent.
Incentive fees remain predominantly at 20 per cent.
About 50 per cent of funds still have a fund level gate and only about 15 per cent have an investor level gate.
About 25 per cent of funds have a soft lock and about 15 per cent a hard lock.
The Opalesque 2010 Roundtable Series are supported by Custom House Group and Taussig Capital.
