Cayman fund registrations have continued their climb since the start of 2020. The three months ending in September were the seventh consecutive quarter finishing with a higher number of total registered funds.
The 12,676 mutual funds on the register in September were 225 more than at the end of the second quarter 2021 and 451 higher than in the first quarter of the year.
Compared to the year-end of 2020 and 2019, total fund numbers have grown by 6.6% and 16.8%, respectively.
Even when limited investor funds, registered for the first time in 2020, are not included, fund numbers have increased by 10.5% over the past seven quarters and 5.7% for the first nine months of this year.
In addition, the Cayman Islands Monetary Authority registered another 485 private funds during the third quarter. This is a 3.5% rise to 14,305 private funds that are now under the supervision of the regulator.
At the end of September, CIMA was responsible for a total of 26,981 funds.
Like limited investor funds, private funds had to be registered for the first time last year and have been a source of significant revenue for the government through annual licensing fees.
Finance Minister Chris Saunders said in September that private fund fees alone had brought in about $50 million in government revenue through the first eight months of the year.
The increase in hedge funds is a reflection of the positive returns generated by the industry and the opportunities in the financial markets both this year and in 2020.
In September, investor sentiment was dampened slightly as concerns over rising inflation, due to supply chain bottlenecks and a developing energy crisis in Europe, weighed on the equity markets.
Funds pursuing equity hedge strategies declined as a result, whereas energy and commodity funds surged.
The global Eurekahedge Hedge Fund Index was down 0.33% in September but still outperformed equity markets such as the MSCI ACWI (Local) which lost 3.55%.
Regionally returns were mixed last month. Japanese hedge funds led with a return of 2.76%, while emerging markets and Latin American hedge funds trailed behind their regional peers with returns of -0.68% and -1.79% respectively, data provider Eurekahedge reported.
Despite the ongoing pandemic, global hedge funds followed up on a strong performance last year with gains of 8.27% so far this year. This was the strongest return over the first three quarters of the year since 2009.
Around 76.7% of funds in the Eurekahedge Hedge Fund Index generated positive returns in 2021.
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