GEORGE TOWN, Grand Cayman, July 28 /PRNewswire/ -- Recent second
quarter figures from the Cayman Islands Monetary Authority (CIMA), have
confirmed the achievement of a key milestone by the Cayman Islands
financial services industry, with more than 10,000 investment funds
currently registered in the jurisdiction.
At the end of June 2008 there were 10,037 funds on CIMA's register,
compared with 9,681 at the end of the previous quarter and 8,972 at the mid
point of 2007. The current annual growth rate of 12% in net new hedge
funds, which takes cancellations into account, is particularly striking in
the context of the deterioration in global markets following the sub-prime
meltdown and associated credit crunch.
"This is yet another round of impressive statistics from CIMA," said
Mark Lewis, senior investment funds partner at Walkers. "The 10,000 barrier
has been breached as hedge funds continue to be formed in the Cayman
Islands, which remains the clear jurisdiction of choice for investment
managers and their advisers around the world.
"Business remains active and the volatility which has impacted world
markets as a result of the credit crisis, and the relatively weak
valuations of many securities, has provided hedge fund managers with great
opportunities to create alpha after a number of years of relatively flat
returns", Lewis added. "Hedge funds have also provided the market with much
needed liquidity, which has been especially beneficial amid the current
tight lending conditions."
The continued growth in net hedge fund registrations is also partly
explained by the absence of a significant spike in fund terminations. While
there has certainly been a slight increase in terminations over the past 12
months, funds are not being closed at an unprecedented rate.
"There have been some forced closures, but in the cases where funds are
struggling, the managers we work with are being pro-active by placing
hard-to-value securities in side pockets, suspending redemptions and
imposing gates. Such measures may enable a fund in distress to ride out the
storm or to wind down its affairs in an orderly manner," said Walkers
investment funds partner Nick Rogers. "In the Cayman Islands the key
drivers behind the actions being taken are the need to treat all investors
equitably and to act in the best interests of the fund, and this provides a
firm foundation for protecting market participants and preserving value."
Among the new funds that have been established in the Cayman Islands,
strategies such as distressed debt and special opportunities presented by
the widespread markdown in asset prices have continued to feature strongly.
"There has also been significant ongoing activity in emerging markets
and commodities," Rogers added. "The convergence of these two hot asset
classes has been particularly interesting."
There are a number of factors behind the Cayman Islands' attractiveness
as a domicile for hedge funds, in particular the stable economic and
political climate, the close relationship between the public and private
sector and the presence of the world's leading professional services firms.
The regulatory regime in the Cayman Islands has been recognised
internationally, notably by the International Monetary Fund (IMF) and the
Caribbean Financial Action Task Force (CFATF) for its high standards. In
the area of transparency and "know-your-client" regulations, these
standards surpass many of the world's top international financial centres.
About The Walkers Group
From offices in the Cayman Islands, the British Virgin Islands, Dubai,
Hong Kong, Jersey, London, and Tokyo, the Walkers group provides legal and
management services to leading FORTUNE 100 and FTSE 100 global corporations
and financial institutions, capital markets participants, investment fund
managers, and growth- and middle-market companies.
The Walkers group is comprised of leading offshore law firm, Walkers;
fund services provider, Walkers Fund Services Limited; and SPV and
corporate services providers, Walkers SPV Limited, Walkers (Jersey)
Limited, and Walkers (BVI) Limited.
In 2006, Walkers was named as the Who's Who Legal Law Firm of the Year:
Cayman Islands, the PLC Which Lawyer? Yearbook Leading Cayman Islands Law
Firm, The Lawyer's Offshore Law Firm of the Year, and was one of two firms
honored as "Offshore Legal Team of the Year" by the Society of Trust and
Estate Practitioners (STEP).
For more information on the Walkers group, visit us on the Web at
http://www.walkersglobal.com or contact us by e-mail at
info@walkersglobal.com. To contact Walkers by phone, call our Cayman
Islands office at +345-949-0100.
SOURCE Walkers
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Related links:
http://www.walkersglobal.com
CONTACT:
Melissa Arnoff of Levick Strategic
Communications for Walkers, +1-202-973-1336, Mobile,
+1-202-276-0070, marnoff@levick.com
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