Major indicators of the performance of the funds industry in 2007, based on the regulatory submissions of over 7,000 funds regulated in the Cayman Islands, are now available from the Cayman Islands Monetary Authority.
Released today, the second annual edition of CIMA’s Investments Statistical Digest shows year-end total assets of US$3.688 trillion and year-end net assets of US$2.265 trillion for the 7,010 funds that had a 2007 financial year-end and that submitted the mandatory Fund Annual Return for that year. In addition to asset value, indicators reported in the Digest include asset allocation, subscription and redemption values, net income, legal and operating structures, service provider geographical locations and more.
Along with the stand-alone analysis of fund activity for 2007, this edition of the Digest also offers readers, for the first time, a trend analysis that compares the demographic and financial data from the FAR submissions of funds that had a 31 December 2007 year-end to the funds that had a 31 December 2006 year-end.
Put together by CIMA’s Investments and Securities Division, the Digest presents information collated from the FAR and the annual financial statements that Cayman Islands-regulated funds are required to submit to CIMA via the electronic reporting system that the Authority introduced in March 2007.
The stand-alone figures on fund activity in 2007 were collated from funds that had a financial yearend any time from 1 January 2007 to 31 December 2007 and that filed a FAR, which totalled 7,010 funds.
The 2007 figures used for the trend analysis were drawn from those funds that had a 31 December 2007 financial year-end and that filed a FAR, which totalled 5,884 funds.
“We are excited to be able to present the 2007 aggregate statistical information and especially to be able to compare the 2007 and 2006 December 31 financial year-end,’ said CIMA head of Investments and Securities Yolanda McCoy.
‘We are looking forward to building on this trend data as we go forward as it is a valuable source of information on the development of the funds industry over time. The ability to provide statistical information of this type enhances the transparency of the industry,’ she said.
‘As a whole, the global hedge fund industry experienced a very positive year in 2007. This is reflected in the aggregate net assets of the funds that submitted their FAR.’
Among the facts documented in this edition is that the Cayman Islands continued as the top location from which fund administration services were provided, based on the proportion of aggregate net assets under administration by administrators in the jurisdiction.
Cayman-based administrators that provided net asset value calculation services had US$682 billion, or 30% of aggregate net assets, under administration. At the same time those that provided registrar and transfer agent services had US$928 billion, or 41% of aggregate net assets, under administration.
Ireland was the second most popular fund administration location in 2007, with 26% (US$602 billion) of aggregate net assets for administrators that provided net US$1 trillion asset value calculation services and 28% (US$641 billion) of aggregate net assets for administrators that provided registrar and transfer agent services.
By contrast, the top region for the funds’ investment managers was North America, with investment managers located there managing 58% of the aggregate net assets (US$1.324 trillion). The top location for investment managers was New York, where investment managers held 30% of the aggregate net assets (US$686 billion). The second most popular investment manager location was the UK, where investment managers managed 20% of the net assets (US$447 billion).
It should be noted that fund administrators located in the Cayman Islands are subject to the regulatory oversight of the Cayman Islands Monetary Authority. Many of the investment managers located in the US and UK are subject to the regulatory oversight by the Securities and Exchange Commission, Financial Industry Regulatory Authority, and the UK Financial Services Authority.
This edition of the Digest again illustrates, as the first edition showed, that the majority of Cayman Islands regulated funds cater to high net worth individuals or institutional investors. A total of 44% of the 7,010 funds captured in the Digest required investors to make a minimum initial subscription of US$1 million or more.
The most common operating structure among the funds was the master/feeder structure, which accounted for 46% of the funds. Among investment strategies the two most popular were multi-strategy and long/short equity. Multi-strategy accounted for 38% of the aggregate net assets while long/short equity strategy accounted for 22%.
The percentage of funds that suspended trading in 2007 was 3%, up from 0.1% in 2006.
A PDF version of the 2007 Digest is now available on the CIMA website at www.cimoney.com.ky.