While the stalled European Union hedge fund regulations have led some firms to leave the Cayman Islands and redomicile in Europe, the world's largest offshore hedge fund jurisdiction is doing just fine.
The Caribbean country said that monthly new fund formations have increased 5% since last year, with an average of 105 funds opening every month. At the same time, terminations have fallen by 40%—only 45 per month.
"These numbers continue to show the attraction of a transparent jurisdiction which is free of intrusive regulation with respect to investment strategy," Anthony Travers, chairman of Cayman Finance, said. "These statistics are in line with our earlier predictions and I would anticipate terminations will decline further as smaller funds wind down and fund managers make decisions about the high water-mark."
Travers also took the opportunity to shoot down speculation that the Caymans were through as a hedge fund domicile due to the EU rules.
"Interestingly, on the subject of migration, and given all the commentary from experts about redomicilation, according to CIMA figures there have been only four—two to Malta, two to Luxembourg and none to Dublin," he said. "We remain assured that on the global stage Cayman's attraction continues to improve."
By contrast, Travers said, the attraction of Europe is faltering.
"We predict that trading talent will continue to migrate out of the EU," he said.
All told, there are now 9,623 funds registered in the Caymans, less than 600 funds shy of the all-time high of 10,200 hit in 2008.