Hedge fund, firm registrations
rebound in numbers in 2011

The total number of investment funds registered in the Cayman Islands has increased to 9,409 in the second quarter of 2011 after declining in the previous six months.

The number of investment funds had reached its lowest point in more than three years in the first quarter of 2011 at 9,261 and is still some way off its peak of 10,291 in the third quarter of 2008, when the financial crisis hit.

The rebound of investment fund registration figures follows a renewed interest in hedge fund investments.

According to the Scorpio Partnership, asset managers have increased the allocation of funds to alternatives investments from 7 per cent in the fourth quarter of 2009 to 17 per cent today. Fifty-nine per cent of these alternative investments represent hedge funds, followed by real estate, commodities and private equity.

A study by Dexia and KPMG in June found that despite the attraction of onshore regulated funds, there has not been a trend towards full redomiciliation of offshore funds to the EU. The majority of fund managers who decided to launch hedge funds in the EU continued to maintain their offshore funds, the survey of hedge fund managers showed.

Company registration figures also improved in the first six months of 2011, jumping by 1.15 per cent from 91,206 to 92,251. New company registrations in the first six months of 2011 were 11 per cent higher than during the same period in 2010 and 31.5 per cent higher than in 2009.

However, the average of slightly more than 800 new company registrations per month in 2011 is still significantly below the average of 1,140 new monthly registrations during the first six months of 2008.

Partnership and trust registration statistics mirror the trend of company registrations, with the first six months of this year seeing more activity than during the same period in 2010 and 2009, but not reaching the peak numbers of 2008.

The decline in the number of banks registered in the Cayman Islands has meanwhile steadied as one Class B licensed bank was added in each of the past two quarters. As of June 2011, 16 Class A banks and 231 Class B banks were licensed 
by CIMA.

Insurance numbers also recovered slightly from a drop in the previous quarter, with five more captive insurance companies added, while the number of Class A insurers remained at 29.

In June, Cayman counted a total of 725 captive insurers, a bounce back from the first quarter low of 720 but still lower than at any time since the end of 2005.

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