The funds industry has established the Cayman Islands as the world’s second largest fund domicile after the United States. By all accounts the sector is very successful.
The number of registered funds is poised to break 30,000, and in 2021 the Cayman Islands Monetary Authority reported US$8.5 trillion in net assets invested through funds on island.
But success is not guaranteed, as the industry is seeing the effects of a wide range of trends, from growing complexity to heightened regulatory scrutiny.
A panel of industry experts at this year’s Spectrum 2023 conference will discuss the impact of more extensive regulatory compliance on the industry and examine Cayman’s competitive position overall.
Nearly two decades of regulatory updates at breakneck speed have changed compliance and due diligence for good. Yet further changes are imminent.
Only at the end of August, for instance, the US Securities and Exchange Commission brought in new regulations for private fund advisers, which include increased reporting and disclosure requirements.
Institutional investors, too, are demanding more detailed reporting and bespoke structures.
Faced with the shifting regulatory landscape, asset managers must continue to invest in their compliance processes. For smaller boutique funds, the costs might start to outweigh the benefits, as the pressure to stay competitive increases.
At the same time funds need to manage the volatile, high interest rate environment and ensure they can acquire and retain the talent they need in a consolidating market.
Nick Rogers, Partner at Ogier, who will moderate the panel says: “Although mature, the funds sector continues to evolve. The asset management industry is facing many challenges, forcing managers to adapt both operationally and in their investment strategies.”
He will be joined by fellow panellists Heather Smith, Senior Vice President, Walkers Professional Services; Cassandra Powell, Managing Director, Harbour Trust; and Stephen Anderson, Partner, Grant Thornton Cayman Islands.
In general, it has become much more costly and complex to operate an alternative investment fund with managers increasingly having to offer customised structures or pursuing hybrid investment strategies.
The panel, ‘Funds 2.0: Current & future trends impacting Cayman Islands Investment Funds’, will examine this growing complexity and highlight the latest trends for fund structures and in terms of client demands.
In addition, panellists will debate Cayman’s role in the funds sector globally and the many challenges confronted by local service providers to stay competitive. This includes the rapid advances of technology impacting funds and service providers and the effect of international tax initiatives will have for Cayman fund structures.
Spectrum 2023 is a full-day event, taking place on 14 September 2023 at the Ritz-Carlton Grand Cayman and further information can be found on the website at www.spectrum.ky.
Cayman Finance members can use code: CaymanFinance5 for a 5% discount on Spectrum.