The Cayman Islands are seeing increased demand from start-up hedge fund managers looking to establish new funds. Cayman provides an advantageous structure for start-ups, allowing managers to run a Cayman-registered fund without requiring a licensed management company. This provides flexibility that may not be available in other jurisdictions. Ifina, an investment fund administrator, has established an umbrella fund structure in Cayman to help new managers launch funds with as little as $1 million in seed capital. This offers a regulated vehicle at lower costs than other administrators typically require, helping emerging managers establish their businesses.

1. January 2011
Cayman Islands
Hedge Fund
Services 2011
Rebound in funds Service providers ‘Mythbusters’
confounds the highlight appeal of actively defend
doomsayers quality standards islands’ image

2. ContentS
In this issue…
03 Four steps to maintain Cayman’s
offshore leadership
By Anthony Travers, Cayman Finance
04 Reports of Cayman’s demise
exaggerated as industry rebounds
By Simon Gray
07 An opportunity for start-up managers
By Derek Adler, Ifina
10 The solvent fund wind-up process
By Ingrid Pierce and Colette Wilkins, Walkers
13 Cayman keeping pace with the
regulatory environment
By Rohan Small and Jeffrey Short, Ernst & Young
14 Plain talking helps service providers get
the message across
By Simon Gray
19 Time to ease the burden
By Alan Raftery, Koger
21 New demands keep administrators busy
By Rick Gorter, Trident Trust Fund Services
Publisher
Special Reports Editor: Simon Gray, simon.gray@globalfundmedia.com
Sales Managers: Simon Broch, simon.broch@globalfundmedia.com;
Malcolm Dunn, malcolm.dunn@globalfundmedia.com
Publisher & Editorial Director: Sunil Gopalan, sunil.gopalan@globalfundmedia.com
Marketing Director: Oliver Bradley, oliver.bradley@globalfundmedia.com
Graphic Design: Siobhan Brownlow, siobhan.brownlow@globalfundmedia.com
Photographs: Courtesy of Cayman Islands Department of Tourism
Published by: Global Fund Media Limited, 2nd Floor, Berkeley Square House,
Berkeley Square, London, W1J 6BD Tel: +44 (0)20 7887 6326
Website: www.globalfundmedia.com
©Copyright 2011 Global Fund Media Limited. All rights reserved. No part of this
publication may be reproduced, stored in a retrieval system, or transmitted, in
any form or by any means, electronic, mechanical, photocopying, recording or
otherwise, without the prior permission of the publisher.
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 2

3. IntRoduCtIon
Four steps to
maintain Cayman’s
offshore leadership
By Anthony travers
There’s no doubt that the global financial tackled in response to the changed global
meltdown has resulted in a fundamentally environment.
changed set of financial and regulatory First, to ensure substantial presence and a
circumstances and a more hostile political viable local economy that provides sufficient
environment. Yet it is perverse that the job opportunities for Caymanians, we must
Cayman Islands have been the focus of implement immediately the suggested
numerous public relations attacks from G20 changes to immigration policy to provide
countries that themselves have suffered 25-year security of tenure for financial
badly at the hands of the global meltdown. professionals wishing to establish operations
The Cayman Islands’ regulatory system in Cayman.
ensured that no financial institution failed, Anthony Travers is chairman of Secondly, we must continue to refute
its Aa3 Moody’s rating is superior to that Cayman Finance through our public relations campaign the
of Ireland, and its budget, despite ludicrous nonsensical suggestions of the truth-deniers
headlines from a transparently briefed concerning tax evasion and tax haven status
popular press, is now balanced. or indeed money laundering. What we do in
Whilst we continue to identify and Cayman is lawful, proper and transparent,
analyse the issues facing us with a view and we must continue to say so.
to realigning our financial services industry, Thirdly, we continue to reject the
we do so without taking overmuch note of suggestion from certain non-elected
blame-deflecting politicians labelling us as European bureaucrats that we introduce
implicated in tax avoidance that arises from direct taxation. It can hardly be said that
flawed domestic legislation, or as having an their economies are a ringing endorsement
inadequate regulatory system. of the concept, and our tax neutrality is now
In the light of the blindingly evident superior to any other.
tax and regulatory transparency, this type Fourth and lastly, we maintain appropriate
of mischaracterisation can no longer regulation recognising that Cayman entities,
be taken seriously – nor can European funds or otherwise, that elect to trade in
Union regulation that has more to do with onshore jurisdictions are subject to the
seeking to constrain hedge funds from laws and regulation of those jurisdictions
pricing European sovereign debt at its true in any event. The real question, given the
market value than any attempt to prevent constraints of the EU’s Alternative Investment
a repetition of the financial crisis. The fact Fund Managers Directive, is how many now
that Cayman continues to register more will chose to do so in Europe.
than 100 new funds a month is some With these policies in place, as the
evidence that the market place endorses the statistics now make clear, we have no doubt
Cayman approach. that Cayman will remain at the forefront of
We believe that the Cayman Islands the offshore financial centres, and indeed
have four central issues that need to be that its position as such will be enhanced. n
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 3

4. oveRvIew
Reports of Cayman’s
demise exaggerated
as industry rebounds
By Simon Gray
Like writer Mark Twain, who famously So far, however, most Cayman lawyers
observed, “The report of my death is an seem too busy setting up new funds to
exaggeration,” members of the alternative spend much time worrying about their future
fund sector in the Cayman Islands have employment prospects. While levels of
become familiar with reading their own business have not returned to those seen at
obituary. Since the onset of the financial the frothy heights of the boom in 2006 and
crisis, and especially the G20-led campaign 2007, new fund registrations are averaging
to clamp down on opaque and poorly- nearly 100 a month, which works out at a net
regulated financial centres, the world’s increase of around 60, according to Darren
leading offshore fund domicile has been Stainrod, head of alternative fund services at
regularly written off by onshore competitors UBS Global Asset Management.
and media commentators. “Over the past 18 months the rate of new
For instance, last July the Financial Times start-ups and the allocation of capital to new
cited hedge fund managers as saying that managers have certainly quietened compared
“the future of the Cayman Islands as a hedge with the heady days of 2007,” says Ogier
fund domicile is bleak.” Tiburon Partners’ partner Peter Cockhill. “There is no doubt that
Mark Fleming was quoted as saying: “The the market has changed and that the time
Caymans will wither on the vine. It won’t between conception and realisation [of funds]
go overnight but very few people are going has grown longer. We’re not back in the days
to set up there ... If I was a Cayman lawyer when you might be asked to set up 10 funds
with more than three or four years of career off the shelf in the space of a week.”
expectation, I would wonder what I’m going However, Cockhill predicts that Cayman
to do with the rest of my working life.” will soon break through the threshold of
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 4

5. oveRvIew
10,000 funds registered with the industry “The recent changes in
regulator, the Cayman Islands Monetary
Authority, and thereafter move back above
regulation will not have a
the quarter-end peak of 10,291 set at the significant initial impact
end of September 2008 – just at the moment
upon Cayman.”
when the Lehman Brothers bankruptcy
tipped the financial industry into a fresh Anthony Cowell, KPMG
spiral of decline.
At the end of September 2010, 9,584 funds “We have made great strides in the past
were authorised by Cima, down from 9,838 couple of years that demonstrate we want
a year earlier, but the regulator’s statistics to be a fully functioning and contributing
show that the sector has been growing again member of the global financial community,”
since the first quarter of last year. The figures he says. “We have signed numerous tax
do not include closed-ended funds such as information exchange agreements with
private equity structures for which there is no countries around the world, something
registration requirement; numbers are elusive, that shows ourselves to be a transparent
but Cayman lawyers say they account for a and co-operative jurisdiction. The days of
significant proportion of business volume. Cayman being perceived as a tax haven are
The numbers – and other green shoots long behind us.”
such as the establishment at the beginning KPMG partner Anthony Cowell adds: “A lot
of this year of a Cayman chapter of the New of politicians and regulators wanted to pass on
York-based Hedge Fund Association – fly in the blame for the entire financial meltdown and
the face of the thesis of long-term decline the issues that they had in their local markets
predicted by doomsayers as a result of onto the Cayman Islands. However, according
institutional investors’ supposed aversion to to our recent research, the additional regulation
offshore funds, the threat of unfavourable is not wanted by the majority of investors,
regulatory treatment under the European managers or service providers.
Union’s Directive on Alternative Investment “The widely held view is that the industry
Fund Managers, and the undoubted increased did not cause or contribute to the credit
appeal to hedge fund managers and investors crisis, and investors don’t believe it will
of the EU’s Ucits cross-border retail fund provide any tangible benefits. Moreover,
regime as a vehicle for alternative strategies. many European investors believe that it will
But Cockhill adds: “The signs at the reduce the number of start-ups, thereby
moment are very encouraging, which is stalling the industry’s engine of creativity.
testimony to two things. The North American It is very interesting to note that the recent
market, which provides 65 per cent of our changes in regulation will not have a
work, has come back, and we have seen significant initial impact upon Cayman.”
no diminution at all in instructions coming Certainly industry members say the
from Asia, principally the regions serviced much-discussed redomiciliation of funds
from Hong Kong, and from Latin America, domiciled in Cayman and other offshore
principally São Paulo and Rio de Janeiro. centres to onshore jurisdictions in Europe
“Over the past two years Brazil has such as Luxembourg, Ireland and Malta,
relaxed its regulations to allow Brazilian or to offshore centres perceived to be in
managers greater access to international better odour with international regulators,
markets, which has given momentum to the such as Jersey and Guernsey, has so far
use of Cayman funds as vehicles for their been tiny. They suggest that the high profile
international investors. Right now, touch of the topic is down in large part to the PR
wood, we seem to be in a sweet spot.” efforts of countries such as Ireland that see
Don Seymour, managing director of themselves as potential beneficiaries.
hedge fund governance specialist dms “Cayman continues to dominate
Management, argues that the jurisdiction’s the offshore hedge funds and private
recovery owes much to the concerted efforts equity market, and we’re not seeing any
made by Cayman to meet international significant amount of that work leaving to
standards in regulation and transparency. go elsewhere,” says Neal Lomax, managing 9
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 5

6. ifina (UK) Limited
Head Office
6, The Court
Holywell Business Park
Northfield Road
Southam
Warwickshire
CV47 0FS
United Kingdom
Sales & Marketing Office
One The Dell
Bishopsgate Road
Englefield Green
Surrey
TW20 0XP
ifina (BVI) Limited
Wattley Building
160 Main Street
PO Box 4443
Road Town, Tortola
British Virgin Islands
...introducing a
International Financial
Administration (USA), LLC
601 Lake Hinsdale Drive
multi-jurisdictional
group, providing
Suite. 207
Willowbrook
Il 60527
USA
ifina (Switzerland) Limited
Bahnhofstr. 52
investment fund
8001
Zurich
Switzerland
administration
services
ifina (Cayman) Limited
Strathvale House
90 North Church Street
PO box 2636
Grand Cayman
Cayman Islands
KY1-1102
ifina (Malta) Limited
Palazzo Pictro Stiges
90 Strait Street
Valletta
VLT 1436
Malta
ifina (Panama) Limited
Suite 2410
Ocean Business Plaza
Aquilino de la Guardia Avenue
(Marbella)
Panama City
Republic of Panama
ifina (Austria) Limited www.ifina.com
Schottenring 16
A-1010 Vienna (Wien)
Enquiries : Derek Adler +44 (0) 1784 433034
Austria dadler@ifina.com

7. IFInA
An opportunity for
start-up managers
By derek Adler
Ifina has had a presence in the Cayman regulatory compliance and meeting rules in
Islands for most of the past decade, but for areas such as capital adequacy can be a
much of that period the largest share of the heavy burden on new businesses.
firm’s administration work has come from the The Cayman structure provides a very
British Virgin Islands. However, particularly good stepping-stone for managers in this
in the past year we have experienced a position. Ifina is careful to conduct thorough
significant increase in the volume of demand due diligence on its new clients, but this
from clients for servicing of Cayman- model allows serious professional money
domiciled funds. managers to begin management of a fund,
There are a number of reasons for the which they might not be able to do in certain
surge in new Cayman activity. First, we are Derek Adler is a director of other jurisdictions. With so many individuals
very much a client-driven business that aims Ifina (UK) leaving institutions over the past year to start
to provide our customers with a choice. If up their own business, it’s not surprising that
they perceive that Cayman is their preferred Cayman has been such a popular choice of
domicile, and that fits with their marketing fund domicile.
and their own structure, we are happy to In addition, even after the crisis, most
comply with their wishes. administrators are reluctant to take on
One of the advantages of Cayman as new managers with as little as USD5m or
a fund domicile is that we can enable a USD10m in assets, no matter what their future
money manager to run a Cayman-registered potential. By contrast, Ifina has long been
fund without having a licensed management ready not only to service start-up funds but
company. Instead Ifina takes responsibility for to provide a structured framework – crucial in
the correct establishment and management the first months of a new operation. Many of
of the fund. While it’s generally desirable for our clients subsequently become regulated in
managers to be regulated in one jurisdiction their home jurisdiction once their business is
or another, there are circumstances where properly up and running.
the Cayman solution is particularly helpful Ifina has established a managed account-
and pragmatic. style umbrella fund structure within which
Over the past couple of years, the demise start-up money managers can establish their
of Lehman Brothers and other banks, the own sub-funds. The Primary Development
divestment of alternative asset management Fund and each sub-fund can accept seed
and proprietary trading operations in capital as low as USD1m, offering all
response to the Volker rule in the US and the benefits of a regulated mutual fund
a broader exodus of traders and asset coupled with tremendous initial and ongoing
managers from the ranks of banks and cost savings.
brokerages have prompted a significant influx This framework is designed to enable
of new managers into the market. the potential future manager stars of
Start-up hedge fund managers may have tomorrow to achieve their potential. History
innovative ideas and loyal clients from their tells us that start-up managers often deliver
previous businesses, but they may not be better performance than large and long-
starting out with a large volume of assets established firms, and the Cayman model
under management. The time, effort and cost gives newcomers the chance to prove
of establishing robust structures, achieving their worth. n
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 7

8. -

9. oveRvIew
5 partner of law firm Mourant Ozannes in the by secondary legislation and regulations
Cayman Islands. “Certain rival jurisdictions to be promulgated over the next two years
such as Ireland have made a lot of noise by the European Commission, and future
about one or two firms redomiciling funds, changes such as the opening up of the
but it has been literally one or two.” passport system and the abolition of private
Cockhill notes: “Luxembourg and Ireland placement arrangements will also require
have both been saying that in the light of the further legislation of this type.
AIFM Directive, managers should consider These concerns have been allayed to
getting ahead of the curve by setting up in some extent by changes made in the directive
a European jurisdiction. The Irish changed during the legislative process, making clearer
their law in December 2009 to allow transfers the basis for determining the acceptability of
by way of continuation – something long non-EU jurisdictions as a domicile for funds
available in the major offshore centres – qualifying for distribution within the union. For
and trumpeted that they were about to be example, the compliance of such jurisdictions
deluged by funds moving from Cayman. But with international anti-money laundering
up to the end of the third quarter of last year, standards will be measured by their standing
Cima’s records show that only four funds with the Financial Action Task Force, while
had left Cayman, two to Luxembourg and their tax transparency will be determined
two to Malta.” by the conclusion of OECD-standard tax
With the EU directive having been finally information exchange agreements with EU
agreed in a compromise form for which member states.
industry members generally have little Tax transparency may be an important
enthusiasm but which most say they can live issue for the offshore banking and fiduciary
with, it will be harder to convince managers sectors, but it is beside the point for the fund
in the future that a European domicile is the industry, according to Derek Adler, a director
only option, Cockhill argues. of fund administrator Ifina. “Running around
“The good news from our perspective, signing tax information exchange agreements
and that of the fund managers, is that the simply means you are signing up to the rules
directive has finally arrived at a decent of the club,” he says. “That’s helpful because
compromise,” he says. “That game has it tells our clients that Cayman is a serious
come to an end, and I don’t expect to see jurisdiction and is on the OECD white list,
more of those horror stories appearing in the but it matters far more for financial planners
press. Our statistics show that people aren’t and trust companies.
buying it. If you’re a third-country manager “By contrast, it doesn’t make any real
you can still distribute in Europe through difference to the fund business, which
private placement, and you will have the has always been regulated and properly
option to obtain an EU passport.” monitored, and has always offered
The AIFM Directive, which is set formally transparency. For many investment managers
to become law during the first quarter of it doesn’t matter how many Tieas a
this year and will come into force two years jurisdiction has as long as they can set up
later, is set to allow non-EU funds access to a fund structure in a regulated jurisdiction,
a European single market of sophisticated their investors can have confidence that their
investors from 2015, two years after funds money is safe, and the fund is being serviced
that are both managed and domiciled within by an independent third-party administrator.”
the EU. In the meantime existing national Neither the anti-money laundering nor the
private placement regimes will remain tax co-operation requirements appear likely
available, although the legislation envisages to cause any problem for Cayman. “By any
their eventual disappearance once the objective standard, jurisdictions including
passport system offers all managers the Cayman and the British Virgin Islands will
opportunity to distribute funds within the EU pass the tests that will allow our funds to be
on an equal basis. marketed under the passport regime,” says
One slight area of concern remaining for Henry Smith, global managing partner of
the industry outside Europe is that much of Maples and Calder, the international law firm
the detail of the directive will be filled out that has its head office at the now-famous 11
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 9

10. wA l k e R S
The solvent fund
wind-up process
By Ingrid Pierce and Colette wilkins
Following the global financial crisis, investors In any event, simply because the court
unhappy with an informal wind-down has jurisdiction to make a winding-up order
process are increasingly seeking to bring does not necessarily mean that it will.
that process to an end and have the board The manager or directors may well still be
replaced by a court-appointed liquidator. considered the best placed to extract the
With solvent funds also being targeted, greatest value from the fund’s portfolio, and
managers need to be aware of the we have already seen the court adopt a
circumstances in which an informal wind- commercial approach and provide alternative
down can, and should, be replaced with relief available under the Companies Law,
a formal liquidation and, conversely, the rather than the draconian and final step
options available to counter such action of liquidation.
or enhance constitutional documents to Upon learning of a winding-up petition,
mitigate risk. managers should immediately consult
There is no doubt that an insolvent fund their offshore and onshore counsel and
can be wound up by the Grand Court of seek urgent advice regarding whether
the Cayman Islands. For a solvent fund, it is appropriate for the fund to resist
the court has jurisdiction to wind up on the petition.
a shareholder’s petition where it is ‘just As a petition can effectively paralyse
and equitable’ to do so – that is, in certain a fund’s ability to operate, action should
limited circumstances such as fraud, generally be taken swiftly. If it is to be
mismanagement or minority oppression. Ingrid Pierce and Colette resisted, consideration should be given
A recent trend has been for disaffected Wilkins are partners at to a strike out, an application to ‘validate’
investors to argue that the purpose for which Walkers in the Cayman Islands the fund’s ability to make ordinary course
the fund was established – active investment payments, and possibly injunctive relief.
– can no longer be achieved upon a lengthy Conversely, management should be
suspension of redemptions or a ‘soft’ wary of expending the fund’s resources
wind-down; put another way, the fund’s in unnecessarily defending a legitimate
‘substratum’ has been lost. petition, although of course the views of
A number of recent Cayman cases other investors will be crucial. Adverse costs
have held that the mere fact that it has consequences may also arise. Regular
become impractical for a fund to continue investor communication will be key.
its investment business (as set out in its In addition to the options set out above,
offering document) is sufficient for the court if possible, an accelerated return of capital
to make a winding-up order. may resolve the issues. Flexibility within
We prefer the alternative view, supported the investment management agreement
by other first-instance decisions in the regarding fees payable during a soft
Cayman Islands and the BVI, that the wind-down, the utilisation of independent
purpose or substratum of a fund is wider directors not affiliated with the manager,
than pursuing a certain investment strategy, fund documents that expressly contemplate
and includes realising investments and a wind-down by incumbent management
returning proceeds to investors prior to a and appropriate non-petition language are
formal liquidation and dissolution. certainly worth considering. n
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 10

11. oveRvIew
9 Ugland House in George Town, the Cayman “By any objective standard,
capital, and the registered office for almost
40 per cent of the world’s hedge and private jurisdictions including
equity funds. Cayman and the BVI
“Those provisions apply not only to
will pass the AIFM
traditional offshore jurisdictions but to
anywhere outside the EU. We think we are Directive tests.”
already a long way up the curve toward Henry Smith, Maples and Calder
satisfying the tests demanded under the
various criteria, whether for the private very encouraged that the Committee of
placement option in the interim phase up European Securities Regulators [predecessor
to 2018 or the passport, if the European of the new European Securities and
regulators do actually apply it to non- Markets Authority] has mentioned the Iosco
European funds and managers.” framework as something that could be
However, the requirement for co-operation considered. The preamble to the directive
arrangements to be put in place between and G20 statements underline that the
the financial supervisor of the fund domicile co-operation arrangements should not be
and that of the EU member state assuming used to discriminate against countries.
regulatory responsibility for managers of non- “Our concern was that they might require
EU funds remains a grey area. Until such time bilateral treaties between each of the 27 EU
as the Commission provides a template for member states and every non-European
such co-operation, it will not be possible to country. You can’t imagine how long and
banish completely fears that the rules may complex negotiating all those bilateral
be drawn up in such a way as to allow EU treaties with every country outside the EU
member states a subjective choice on which would be. That just doesn’t make sense,
fund domiciles to accept and which to exclude. especially if the overriding objective is to
“The devil will be in what these introduce a globally-agreed framework of
regulations are,” Cockhill says. “Managers regulation of systemic risk issues within a
will need to make an assessment over the reasonable timeframe. By contrast, the Iosco
next few years on whether or not they want multilateral agreement would tick a lot of the
to go for a full passport or whether they boxes from a European perspective.”
will continue to market their fund discretely One of the flaws in the arguments of
through private placement [as long as this those predicting Cayman’s eventual decline
remains permitted]. It really depends on as a fund domicile is the assumption
the proportionality of the regulations the that most if not all managers will require
Europeans come up with.” access to the European market as a matter
Smith notes: “Cayman and the BVI are of course. Smith notes: “Some European
already party to the International Organization jurisdictions historically have not had private
of Securities Commissions multilateral placement regimes, which made it difficult
memorandum of understanding. There is to market non-European funds there. The
already significant co-operation between their passport could offer an opportunity to
regulators and other parties to the Iosco access those markets.
memorandum of understanding. We have “But the passport may not be particularly
significant bilateral co-operation agreements helpful for non-European-based managers
with the UK’s Financial Services Authority that don’t have pan-European marketing
and the US Securities and Exchange and distribution capabilities, but might just
Commission as well, and Cayman and the be looking at one or two major investors
BVI already have tax information exchange or pension funds in a couple of countries.
agreements with most of the major EU Private placements arrangements may have
member states. worked very well for their purposes, as well
“We have been lobbying the Europeans as giving European pension funds access
to look to the Iosco framework as a means to this type of fund. Ultimately a decision on
of satisfying the regulatory co-operation whether to seek a passport will come down
requirement of the directive, and we are to how Eurocentric each manager is.” n
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 11

12. Ready for a change?
Ready for a change?
each of which is a separate legal entity. Ernst & Young LLP is a client-serving member firm located in the US.
In uncertain times, times, how you respond to market ups and downsmake all the all the difference
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13. eRnSt & YounG
Cayman keeping pace
with the regulatory
environment
By Rohan Small and Jeffrey Short
The Cayman Islands – one of the world’s These changes will not only have
leading offshore jurisdictions for the a material impact on operational and
establishment of investment funds – has compliance requirements and processes but
faced many tests to copper-fasten its also possibly entail an increase in document
dominant position. And now, even in the requests and examinations by the SEC.
face of its toughest test ever in terms At Ernst & Young we are keenly focused
of intensifying laws on regulation and and involved in preparing our clients for this
transparency, both from the European Union new landscape. We are providing guidance
and the US, the fund jurisdiction looks set to by reviewing their infrastructure, reporting
overcome yet another hurdle. and record-keeping, IT systems, assessing,
Take the new EU Alternative Investment designing and implementing appropriate
Fund Managers Directive. The AIFMD will compliance programmes, and performing
impose a number of additional registration gap analyses and mock examinations to
and reporting requirements on alternative ensure compliance.
investment funds as well as applying limits There is clearly no doubt that the Cayman
relating to manager remuneration. From a Islands are facing stronger competition.
Cayman perspective, it will mean that a non- Cayman has a long history of working
EU manager will need legal representation together with foreign regulators and is highly
in its member state of reference and comply rated by the Financial Action Task Force. The
with the provisions of the directive in full, Cayman Islands Monetary Authority has also
along with the jurisdiction meeting certain confirmed its commitment to entering into
Rohan Small is an audit
other conditions. partner and Jeffrey Short a
co-operation agreements with EU regulators
Cayman is confident that it will meet financial services partner at as a matter of priority. All this augurs well
and comply with these provisions. Various Ernst & Young in the Cayman for the industry, which is extremely receptive
Islands
parties in Cayman are already preparing and, more importantly, well prepared for the
for enhanced regulatory co-operation and anticipated changes.
the increase in transparency and reporting It is also important to point out that
requirements. Cayman is currently setting up approximately
On July 21, President Obama signed into 100 new funds per month and will soon
law the Dodd-Frank Wall Street Reform and be back to pre-crisis levels in terms of
Consumer Protection Act. This will have registered funds.
the most sweeping impact on the financial Changes are afoot and the dynamic nature
system since the Great Depression. It of the Cayman Islands will allow it to fit well
will require many investment advisors of into this new alternative investment era. The
hedge funds and private equity funds to investment industry in the Cayman Islands
register with the Securities and Exchange is well on its way to fine-tuning its regulatory
Commission. In addition, there will be regime, operational processes and strategies,
new record-keeping requirements and be it for the AIFMD or US registration
compulsory disclosure of certain financial responsibilities, to ensure continued success
and operational information. in this new environment. n
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 13

14. on d u v I e w
I veRStRY
Plain talking helps
service providers get
the message across
By Simon Gray
For years, industry professionals Firm, the 1991 blockbuster novel by the
acknowledge, the Cayman Islands financial hitherto unknown John Grisham, which
services sector – and the territory’s painted a picture of a jurisdiction awash with
government – remained largely silent as the criminal cash brought in by the suitcase-full
jurisdiction was branded as the epitome of – cemented two years later by an equally
the real and supposed ills of the offshore successful film, starring Tom Cruise. The fact
financial industry – tax evasion, money that extensive scenes were filmed in Grand
laundering, fraud and worse. But those days Cayman, its beaches and hotels gave the
are now decisively over. film an unfortunate verisimilitude.
For at least two decades the islands More recently, as a Democratic Party
have suffered from a dramatic dichotomy candidate for the presidency and again after
between its image among financial sector taking office in January 2009, Barack Obama
professionals, among whom its depth of repeatedly cited Ugland House – the Cayman
expertise and experience is well established, home of law firm Maples and Calder – as
and that held by the general public – including the home of 12,748 (later 18,857) companies.
many politicians, for whom ‘Cayman’ often “Either this is the largest building in the
serves as shorthand for the squirreling away world or the largest tax scam in the world,”
of money out of sight of the taxman. Obama said.
Perhaps few things contributed as much Less widely reported is the fact that when
to this unfortunate public image than The a team from the United States Government
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 14

15. InduStRy
Accountability Office was dispatched to “There’s still a huge amount
Cayman by the Senate Finance Committee
in 2008 to investigate Ugland House, they of misinformation about
found that only 5 per cent of the companies Cayman disseminated,
incorporated with the building as their
and it’s very frustrating
registered office were wholly US-owned
and fewer than 50 per cent had a US to see the inaccuracies
billing address. They included investment that appear.”
funds and structured-finance vehicles, as
Neal Lomax, Mourant Ozannes
well as vehicles used or supported by US
government agencies, the Export-Import
Bank of the United States and the Overseas this reality will become better understood
Private Investment Corporation. and more broadly acknowledged by policy-
It’s appropriate, then, that efforts to counter makers and others as the reasons for
what at times has been a barrage of negative the recent financial crisis are more fully
comment and inaccurate information about analysed and as the ensuing regulatory
the Cayman Islands are being spearheaded response evolves.”
by Anthony Travers, a longstanding senior Some industry members are more forceful
partner of Maples and Calder who helped to in their response to the criticism, noting that
draft much of the jurisdiction’s key financial while the Obama campaign was expressing
services legislation. shock about the number of companies at
Since Travers became chairman of industry Ugland House, the home state of his vice-
association and promotional body Cayman presidential running mate Joe Biden, Delaware,
Finance in 2009, the organisation – itself boasts buildings housing the registered offices
renamed from the rather less snappy Cayman of as many as 120,000 companies.
Islands Financial Services Association – has Ogier partner Peter Cockhill agrees that the
become proactive in tackling and refuting change of strategy is overdue. “Unfortunately
inaccuracies and misinformation about in the past we may not have paid enough
Cayman wherever they appear. attention [to adverse publicity], we were far
Arguably it’s something that should too reactive, but that’s changed in the past
have been done earlier. “Having a single 18 months,” he says. “We have an invigorated
body representing the Cayman financial financial services body, Cayman Finance,
services industry was long overdue, but able to spread a message and disabuse the
since its establishment Cayman Finance mythmakers. When we see an ill-informed
has done well in responding to some of the statement or wrongful characterisation, we
misinformation about the jurisdiction,” says immediately respond – our approach is
Neal Lomax, managing partner of law firm zero tolerance of misinformation. And that’s
Mourant Ozannes in the Cayman Islands. “If beginning to pay dividends.”
there is a negative, it is that we should have Alan Milgate, a director of Harbour, a firm
started it five or six years ago.” that specialises in providing independent
Lomax says the task is a never-ending directors and trustees to funds in Cayman,
one. “There’s still a huge amount of says local companies have banded together
misinformation about Cayman disseminated, to defend the jurisdiction and to convey
and it’s very frustrating to see the a coherent message to the outside world
inaccuracies that appear,” he says. “Cayman about the quality products and services that
is a well-regulated jurisdiction where hedge the islands offer. “All the service providers
funds and other investment vehicles suitable here are making a concerted effort to
for institutional investors can be set up on a create a united front to stand up for our
tax-neutral basis. jurisdiction,” he says.
“While the importance of a tax-neutral “We’re very proud of our product and
platform may be misunderstood in some that we won’t let false representations go
quarters, the reality is that the world financial unchallenged. Cayman Finance is actively
system needs such jurisdictions to facilitate searching for inaccurate stories and rebutting
cross-border capital flows. Our hope is that them, but at the same time service providers 17
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 15

17. InduStRY
15 are going out to sell our product much more “Our approach is zero
aggressively than we have in the past.”
Milgate says the financial crisis, which saw
tolerance of misinformation,
a dip in both the number and the aggregate and it’s beginning to pay
assets of Cayman funds as well as a
dividends.”
downturn in other major business areas such
as securitisation, has prompted a wide-ranging Peter Cockhill, Ogier
rethink of the way the jurisdiction is marketing
itself. “It has forced us to look at what we’re with a structure and a long track record, are
offering people and to improve it, and to seeing capital inflows.”
understand better what they want,” he says. He adds: “Large institutions are still
“We continue to have a great advantage allocating capital to hedge funds or even
here in having a government and a increasing their allocations, but this process
regulatory body that interact actively with is favouring the bigger managers. There is
the local industry. We’re very fluid, enabling still nervousness among allocators in the
us to develop our laws and regulations and wake of the financial crisis, and no-one will
strengthen our product much more quickly ever get fired for allocating to a big manager.
than many other jurisdictions. Whereas eight They are still cautious about taking a risk
or nine years ago people were more focused on a smaller, less established manager, and
on running their own businesses, today we certainly a start-up.”
recognise that we all have a responsibility to KPMG partner Anthony Cowell says: “A
the jurisdiction if we are to be as strong as few years ago we would see capital coming
we need to be.” in within a few months of a start-up, but
Certainly the current inflows of new now that period is being stretched, even
business indicate suggest that the Cayman though the environment now is clearly better
name is not putting off institutional investors, than what it was. There is consolidation as
as was suggested might be the case a year some larger managers grow by taking over
or two ago. Industry members report that smaller competitors. Meanwhile, what we
much of the capital returning to hedge funds call entrepreneurial institutional managers
is going to established managers with solid are diversifying into mainstream fund
reputations, and that while a wave of new management, proprietary trading, restructuring
talent is entering the market, spinning off of distressed vehicles and structured products
from existing managers or big institutions rather than just hedge funds.
shedding proprietary trading operations, they “That’s a huge change for the industry.
are finding the money-raising process long Previously managers tended to offer core
and arduous. products, and grow into super-boutiques,
“We are finally seeing some growth but now firms are coming out with a huge
returning to the market following the financial variety of products to attract institutional
crisis, but it is a lot slower than what we capital. Sometimes the products stick,
saw during our heyday, and funds are sometimes not. The difference between
certainly a lot smaller,” says Don Seymour, these players, whose controls and processes
managing director of corporate governance are institutional, and traditional asset
specialist dms Management. He notes that management houses is that they’re very
there is a lot of interest in start-up activity, much more focused on generating alpha.”
but the capital-raising process is much more Cowell argues that the new money is not
protracted than three or four years ago, all institutional: “Interestingly, high net worth
especially for smaller managers. investors are coming back into the industry,
“One large administrator told me they had albeit principally to larger rather than smaller
something like 40 start-up managers in the managers and to fairly straightforward
pipeline, but they can’t launch their funds strategies. The fact we’re starting to see new
because they haven’t been able to raise inflows from high net worth individuals as
sufficient capital,” Seymour says. “There is well as institutional investors is very positive
a big-name bias. Our existing clients, who for Cayman.”
have been established for 10 years or more Large institutional managers have largely 20
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 17

18. What’s missing?
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19. koGeR
Time to ease the
burden
By Alan Raftery
There is a new-found hedge fund a necessity and also where investors are
environment and the message for all asking for greater granularity.
involved is clear – be prepared. Today, it ETAS also applies within the context of
is vital for all in the hedge fund industry to liquidity, as by allowing authorised third
have the right tools to survive and succeed parties to access information, it enables
in a volatile setting. them to quantify the liquidity position of their
One of the most important requirements investments.
is the right technology and operational The alternatives arena demands extremely
infrastructure, one that can deliver the robust operational processes and software
service levels required by clients and their solutions. Hedge fund managers looking
investors, and that can ensure smooth Alan Raftery is head of to attract new money need to make sure
transition of front-to-back offering – from operations with Koger in their technology is right in order to ease the
order management through to accounting. Dublin burden on the investment manager – whose
Increasing efficiencies while having the main responsibility lies in creating alpha.
flexibility to adapt to different trends is Hedge funds and their service providers
definitely the order of the day. must have fully integrated software solutions
The alternative investment industry that help them to meet their goals and
continues to go through a period of provide the highest levels of client service,
transformation in the wake of the global systems that enable them to stand out in this
financial crisis, mainly driven by a swathe of new era and allow them to cope better with
new regulation across various jurisdictions. market dynamics and turbulence.
This trend will place greater demands on the Koger’s main transfer agency platform,
operational component of the industry. NTAS (New Transfer Agency System), has
A particular area that will be impacted been built on the basis of all complex
is anti-money laundering measures, and processes, such as end-of-period incentive
specifically the need for identification of fee processing, being fully automated,
underlying beneficial owners. There will also thus eliminating manual errors and cutting
be a greater focus on liquidity as managers processing time to a minimum. Koger has
analyse the mechanics of the European also recently launched SWIFT-compliant
Union’s Ucits regime. For example, will 20022 messaging capabilities that will drive
they be able to generate acceptable returns efficiencies for our clients by reducing the
considering the restrictions inherent in the cost of trade delivery and receipt, with the
Ucits rules? added benefit of reducing manual errors.
At Koger, we have the necessary solutions Koger’s products can also help reduce
to assist clients in addressing the added costs through our rule engine, which allows
issues in the field of transparency and exceptions to fund level rules for charges
liquidity. Our web front-end product, ETAS such as management, administration and
(for Electronic Transfer Agency System), incentive fees.
allows authorised third parties such as asset Overall we see compliance and liquidity
managers and investors to generate reports playing a major role over the next year or
on a real-time basis. This is consistent two. In an ever-evolving industry, Koger
with recent market developments where is well placed to service the needs of
increased access to information has become managers and administrators alike. n
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 19

20. InduStRY
Global Asset Management, Cayman’s
largest fund administration business. “We’re
seeing a fair number of launches from new
managers leaving prop desks to set up their
own businesses and spin-offs from existing
managers, although they are struggling to
attract the start-up capital they might have
done in the past.”
In addition, he says, the beleaguered fund
of hedge funds industry is showing renewed
health, albeit a year after the single manager
hedge fund sector began to enjoy renewed
inflows. “Our fund of funds clients are now
seeing a lot of activity in terms of requests
for proposal. In addition, we are seeing large
inflows from family offices, sovereign wealth
17 resumed their pattern of activity from before investors and other institutional investors.”
the crisis, according to Ingrid Pierce, a partner To help start-up managers get their
and head of the Cayman Islands hedge business underway despite the capital
funds group at law firm Walkers, but she says constraints, administrator Ifina has just
newcomers are starting to gain some traction, launched the Cayman-domiciled Primary
especially if they have a track record from Development Fund, a segregated portfolio
another firm. “Our staple large clients may umbrella fund allowing managers to establish
have experienced some dislocation, and they a regulated, audited and transparent fund at
may not be completely back to normal, but a vastly lower cost than would be entailed
they are continuing to set up funds,” she says. by going it alone. Ifina’s partners in the
“However, there seems to be much more venture are Barclays in the Isle of Man,
movement among start-up managers now offering banking services, broker MF Global,
than earlier last year, when there was a lot auditor Baker Tilly and Cayman law firm
of noise that didn’t translate into actual fund Solomon Harris.
launches. “Particularly over the last year or so, many
“By and large, these start-up clients have traders have left banks or brokers with some
some sort of track record, perhaps because sort of client base and an asset management
they’ve been affiliated with a well-respected idea,” says Ifina (UK) director Derek Adler.
manager. There aren’t that many truly “But to get the business up and running, get
new boys – more those who have build a regulated and meet requirements such as
reputation somewhere else and have taken it capital adequacy rules takes time and effort,
to a new outfit.” as well as money that the start-up manager
One of the most important changes to may not have to begin with.
the alternative investment management “The Cayman structure provides an
environment since the crisis has been the opportunity and a stepping stone for serious
adoption (more or less) of the Volker rule, professional money managers – although we
conceived by the former US Federal Reserve check out their credentials very thoroughly.
chairman and more recently Obama adviser It would not be possible for some of these
Paul Volker, designed to restrict proprietary new managers to set up a mutual fund in
trading and other types of speculative another jurisdiction, but the Cayman rules
investment by US commercial and investment make it possible.
banks. Despite the currently difficult fund- “Very few fund administrators will take on
raising environment, this could prompt a managers starting up with as little as USD5m
continuing flow of business for Cayman over or USD10m, but that’s right up our street.
the long term, according to industry members. It provides the managers with a structured
“In a way, the Volker rule is actually framework that they can’t get elsewhere,
helping Cayman,” says Darren Stainrod, and in fact many of the new businesses
head of alternative fund services at UBS we take on become regulated in their home 22
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 20

21. TRidenT TRuST fund SeRviceS
New demands keep
administrators busy
By Rick Gorter
Earlier this year, a shadow seemed to hang report on the fund’s performance.
over the fund administration sector in the With increased regulation and the burden
Cayman Islands, amid reports of staff cuts of compliance, administrators are well placed
and movement of operations to lower-cost to shoulder much of this burden, as they
jurisdictions. While some of this may have are more in tune with the regulatory and
taken place, the overall view of the sector is corporate requirements of the jurisdiction of
that of steady growth. domicile. Indeed, compliance has become a
As the world moves further away from growth business for fund administrators.
the financial downturn, the alternative asset Hedge fund managers are increasingly
investment sector is looking at the future turning to independent third parties for
from a positive viewpoint. From a fund Rick Gorter is managing middle- and back-office functions including
administration perspective, business can only director of Trident Trust Fund portfolio accounting and reconciliation, pricing
get bigger. After the Madoff scandal, most Services Cayman and valuation, custody of both collateral and
hedge funds have parked their administrative non-collateral assets, cash management, NAV
responsibilities in the hands of a third-party calculation and counterparty risk mitigation.
specialist. Investors now want independent Independent administrators offer
administration at all costs, insisting a sophisticated IT platforms and related
second set of eyes is overseeing the asset internal controls and procedures that provide
manager’s activities. for the proper accounting, valuation and
The logic is compelling that a hedge reporting of fund positions. They are also
fund cannot umpire its own game, but it themselves subject to internal and external
has taken some time for this to become audit and regulatory scrutiny to ensure the
the administration paradigm. The US has integrity of their operations.
only recently caught up with European Proper administration is a long-term
funds, which have employed third-party litmus test for investor confidence. It is also
administrators for quite some time. in the interest of the fund sponsor, whose
The related truism is that the main own returns from the fund can be affected
responsibility of fund managers is the by the quality of administration. Investor
marketing of their fund and the management sophistication and growing compliance
of investor assets. Their intellectual capital is and regulatory requirements demand new
best exploited in these activities, rather than in levels of transparency – and an independent
the time-consuming administration of the fund. administrator can make sure that these
Independent administrators help fund levels are achieved.
managers in a variety of ways. For example, From a Cayman perspective, the industry
they provide an extra level of security has come a long way. The islands have
against fraud as a third party responsible stood the test of time to become one of
for confirming that the hedge fund has the the most flexible, efficient and experienced
assets it says it does and that the valuation hedge fund domicile and servicing
process has been properly applied. Investors jurisdictions. And when the AIFM Directive
also customarily want the reporting function and new SEC regulations come into force,
relating to a fund to be independent of the the islands are likely to see continued growth
fund sponsor, which is achieved by using a in demand for the spectrum of services
reliable and experienced third party that will independent administrators can offer. n
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 21

22. InduStRY
20 jurisdiction, such as the UK, within six systems, SAS 70 certification and appropriate
months or a year. But in the meantime it professional indemnity cover.”
provides a start to managers who might turn Essentially, Gorter argues, investors want
out to be the industry stars of tomorrow.” to see administrators offering an independent
Cayman may not have the capacity to institutional operational environment.
provide on-island services to all the funds “They also require independent directors,
domiciled in the jurisdiction, but the size of its individuals who actually provide meaningful
administration sector is often overlooked. Like oversight to the operations and do not have
the industry as a whole, administrators have conflicts of interest with the other service
suffered from the shrinkage of fund numbers providers,” he says.
and assets as a result of the crisis – the “In a nutshell, the regulatory environment
number of firms holding full licences fell from has increased exponentially, and so has
102 in at the end of 2008 to 94 in September investor due diligence. Whereas in the past
2010 – but there are signs of recovery, like the investors might have distanced themselves
establishment of a Cayman office last January from the fund’s operations, now they’re not
by HedgeServ, which is now one of the top 15 only doing due diligence on the fund but
administrators worldwide. also on its service providers, especially the
“We have been seeing new business administrator.”
mostly from existing clients, and activity this The presence of independent directors on
year has been stronger on the private equity the board is also more important than three
side than among hedge funds,” says Rick or four years ago, according to Seymour,
Gorter, managing director of Trident Trust who as head of the investment services
in Cayman. “Toward the end of last year, division of the Cayman Islands Monetary
however, we saw increased interest in the Authority, the industry regulator, established
launch of new funds, especially from the Far the regulatory framework for hedge funds in
East, although we have also been winning the late 1990s. Within a few years, he says,
business involving existing funds being it became clear that the common thread in
transferred to us from other administrators.” enforcement cases against Cayman hedge
However, Gorter is confident about the funds that were not being operated in a fit
future outlook for the industry. “Cayman and proper manner was a lack of proper
offers a very sophisticated administration corporate governance.
base, with the expertise and experience that “Although we had the best independent
may be lacking in some of the international administrators and auditors, where things
financial centres new to the business, and were going wrong was that we didn’t have
in terms of IT infrastructure we can offer the best independent directors, which
the same if not better service as onshore was the final piece in the fund control
centres,” he says. structure,” Seymour says. “But the industry
“In the case of some clients for which has changed dramatically since 2000 and
previously we might have been doing independent directors are now viewed as a
registrar and transfer agent work, we are critical piece of the fund control structure.
doing full administration. This reflects the “To be successful marketing a fund today,
impact of the Madoff and other scandals you need best of breed standards in the
in the US, which has led investors to push areas of transparency, liquidity, infrastructure
managers to use external administrators and independence. These issues were
rather than do it in-house. Third-party already coming to the fore, but Madoff
administration has long been the norm in brought them more sharply into focus.
Europe and now it is becoming so in the US. There was not proper segregation and due
“Trident is also benefiting from investor diligence within his structure, and it showed
demands about the kind of service providers investors everywhere that these are critical
managers use, especially in the case of issues. It is investors that are now driving
larger funds. They are insisting not only demand for independent directors. They
that the administrator is independent but recognise that a good independent director
that they are a business of substance, with on the board is one of the best insurance
an international footprint, state-of-the-art IT policies against things going wrong.”
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 22

23. InduStRy
Milgate says it’s important not only that “Some clients prefer working
directors be independent and bring relevant
expertise to the job but that where practical with a Cayman service
each fund should make use of local service provider due to confidentiality
providers. “We prefer relevant services to be
and high service levels.”
provided by people in Cayman,” he says. “You
need an appropriate amount of infrastructure Darren Stainrod, UBS
to support more than 10,000 Cayman-domiciled
funds, and we think it’s good for service international financial centre in a dominant
providers to be actually resident in Cayman position, which Cayman is.
and an active part of the regulatory model.” “Whenever laws or regulations change,
Nevertheless, Stainrod says that some it’s people that transact business, and
Cayman administrators have adapted to Cayman is uniquely well positioned. The law
capacity issues by outsourcing some firms, administrators and auditors here are
functions to operations in other jurisdictions, all part of international networks. The audit
although the jurisdiction remains the focus firms here are all plugged into their North
of the services UBS provides to clients. “The American counterparts, US onshore and
trend over the past few years has been to offshore auditing goes on all the time, and
move certain processes to onshore or lower- our banks are subsidiaries or branches of
cost jurisdictions,” he says. “For example, onshore institutions with global reach.
many have moved the NAV accounting and “The world has shrunk, and Cayman is
portfolio valuation to Canada, with corporate on the main grid. This could be a good
and shareholder services staying in Cayman. opportunity for us. Things like the Dodd-
“The migration of administration processes Frank Act in the US often wind up with
made sense during the period from 2005 to unintended consequences, but very few have
2007 when the industry was booming and the agility and the wit to understand what the
Cayman was running up against the limits of market wants and give it to them within the
its capacity. Our business has a workforce requirements of an interconnected financial
in the hundreds, but the infrastructure in regulatory system.”
Cayman would not be able to cope with Cockhill insists that he and his colleagues
operations employing thousands of people. are bullish today in a way that they weren’t
There are also cost issues.” 12 months ago. “The storm clouds have
However, Stainrod says the jurisdiction come, threatened us and now seem to
has certain advantages, such as offering an be passing, although I’m not complacent,”
attractive living and working environment he says. “There are always challenges
that helps firms to recruit well-qualified staff. ahead, especially with France holding the
He points to the establishment in Cayman presidency of the G20, so I’m sure there will
of new administration firms as evidence be more anti-offshore rhetoric.
that it remains an attractive and competitive “However, I do think the world has become
business environment. “Certain processes a lot better informed. International tax
suit Cayman, such as funds of funds, share information exchange agreements are a very
registry and corporate services, and some good thing because more than anything else
clients prefer working with a service provider gives the lie to the notion that financial centres
here due to confidentiality and high service such as Cayman are in some way obstructing
levels,” he says. the needs of the onshore economies.
Cockhill acknowledges that the business “We’ve been making information on
environment in which Cayman operates has individuals with money in Cayman available
changed over the past few years, but he is under the EU Taxation of Savings Directive
confident that the jurisdiction will continue to for six years, a completely transparent
thrive. “We’ve heard lots of stories about how mechanism that assures European countries
the world is going to be more prescriptive that their tax laws are not being flouted. Today
and restrictive, but there are opportunities we are competing on a true argument rather
in every evolution,” he says. “There are than a mischaracterisation, and in the future
definitely opportunities for a well-regulated that will be very much to our advantage.” n
CAYMAN ISLANDS Hedgeweek Special Report Jan 2011 www.hedgeweek.com | 23