June 25, 2006
Cayman hedge fund industry: Breaking all records!
The hedge fund industry haven has more than established its credibility time and time again. At the end of 2005, the number of hedge funds registered in the Cayman Islands was 7,106. In the first five months of 2006, the number has moved up by 665. Cayman Islands Monetary Authority (CIMA) stated recently that the phenomenal growth in the number of hedge funds in the Cayman Islands has long surpassed other offshore tax havens like British Virgin Islands and Bermuda.
International investors who want to avoid being taxed in their home country as well as in the country, into which they invest, are understandably quite attracted to Cayman Islands due to the prevailing investor friendly tax laws in place.
The industry’s growth can be attributed to an extensive infrastructure of legal and financial service providers, along with stringent government oversight. It may be noted that quite a few U.S. pension funds have been seen investing in U.S. hedge fund managers through their offshore shell structures to legally avoid U.S. taxes. This has added volumes to the industry that is over $1.3 trillion in size.
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