New fund registrations lowest in many years

The total number of investment
funds registered with the Cayman Islands Monetary Authority fell by 3.2 per
cent in the fourth quarter of 2009.

At the end of 2009 there were 9,523
funds registered with CIMA down from 9,838 at the end of September 2009.

The total number of registered
funds is the lowest since the fourth quarter of 2007.

Despite anecdotal evidence given by
Cayman law firms at the turn of the year that at least interest in new fund
formations had picked up again, the number of new funds declined from 320 in
the third quarter to 263 at the end of 2009.

This is effectively the lowest
quarterly number of new fund registration in years. The data requested from
CIMA goes back to 2006, but fund formations are likely to have been higher in
years prior.

At the same time the number of fund
terminations has increased considerably to 804 in the final quarter of 2009. In
contrast to registrations, fund terminations are more cyclical and tend to be
higher in the last quarter of a year.

Only in the fourth quarter 2008
there were more funds struck off the CIMA registry. The record number of 854
fund terminations then was nearly twice as high as figures in the final
quarters of 2006 and 2007.

On an annual basis the number of
wound up funds was the highest ever at 1395, representing a slight increase
over 2008’s 1377.

New registrations in 2009 were at
their lowest in years at 1,158. The figure constitutes a decline of 30 per cent
compared to 2008, when new registrations had fallen already by 17.7 per cent
from 2007.