“When you go into a PE
fund, you know precisely
what you’re investing in.”
Ingrid Pierce
We are seeing more countries looking to Cayman to see how they
can harness and leverage this tremendous amount of investable
capital that’s pooled in Cayman and redeployed around the world. I’m
very positive, we anticipate even further growth and acceleration in
that space.
Tim Rossiter: There has been considerable consolidation in the
industry but from the Cayman Island Fund Administrators Association’s
view, we think there should be that flight to quality. We’ve got great
infrastructure here, there’s an excellent ecosystem in particular for
fund accounting coming through the audit firms.
That equals a great opportunity for us to embrace. Changes in the
economic substance regulations and other regulations globally mean
we need to ensure that the rest of the world understand what goes
on here. The more we can communicate what we do and how we add
value to the rest of the world, the more Cayman will benefit.
We see other jurisdictions trying to replicate our models in particular
our private equity structures. Some want less regulation but the
oversight we have in place, on our fund structures, is pragmatic
and designed to make sure that people are doing the right thing via
licensees and without too much bureaucracy.
The media are constantly turning things to a negative connotation,
so we need to keep pushing through the message that we have high
standards and high quality here and that is the reason we have an
advantage to the rest of the world.
Victor Murray: There is something that’s unique to the Cayman Islands:
being a professional director is a recognised profession here in its own
right and that is borne out by our membership. The Cayman Islands
Directors Association now has some 320 members, all of whom
provide professional director services to financial services. When a
business comes to the Cayman Islands they can be assured they can
get a high quality, independent director who knows what they’re doing.
Anne-Marie Leadbetter: We at Harbour sit as directors on various
sized funds and see a wide range of products, and for the most
part the growth we’re experiencing is through the big firms getting
bigger. The large institutional investment managers are creating more
products, due to demand from the investors who want different types
of structures or different type of investments.
That means getting a foothold is getting harder and harder for
small investment managers. It’s a bit prohibitive for new investment
managers who are wanting to start up but, if they can last through
those lean two or three years and get to that critical mass, they can
survive and thrive.
Murray: We have seen large pension funds that can’t get the growth
from bigger managers backing smaller managers to get their growth.
What other changes are you
seeing in the landscape?
Farrington-McSweeney: We are seeing changing fund structures
and product mix; a rise in people moving away from the traditional
hedge fund products. We are seeing a lot more private equity (PE)
structures in the last six months. If we get 100 audit queries, 45 of
those are now PE which never happened before. We have even
established a new PE group whose sole job is to go out and meet
with these newer managers.
CAYMAN FUNDS | 2019