Institutional investors increasingly use Cayman-based private funds amid global volatility. According to the Walkers Fundamentals 2025 white paper, published by the eponymous legal and professional services firm on 5 Nov., a mix of emerging strategies are driving the growth of private funds.
According to data from the Cayman Islands Monetary Authority, there were 17,609 private funds registered in the Cayman Islands by the midpoint of 2025. That number has climbed steadily upwards in consecutive years since the level of 14,679 in 2021. That gives Cayman a dominant position in offshore private funds, accounting for 68% of total non-US fund domiciles in 2024.
It’s striking that this steady increase has come despite an increasingly “challenging fundraising environment”. 2025 has been marked by volatile public markets, fears of a tech bubble in valuations and more complicated private equity exit conditions, said the report.
“Despite the volatility experienced by global markets in 2025, the Cayman Islands private funds industry has shown remarkable resilience and adaptability across asset classes,” said the report.
Different strategies
Within the overall increase in private funds, there is a mix of strategies that appeal to investors in these challenging times. According to Walkers’ data, the most popular in 2025, was private credit funds. One quarter of the private funds that Walkers worked on in 2025 were private credit funds. That number has fluctuated between 35% in 2023 and 18% in 2024, while this year saw private credit regain its top spot.
The second-most popular strategy was ‘secondaries’, which has increased steadily to 20% in 2025 from 17% in 2023. The report backed up the trend with third-party data from Secondaries Investor that shows secondary funds around the world raised US$80.8 billion in the first half of 2025 – a record figure.
With limited appetite for initial public offerings amid volatile stock markets, traditional exit routes have become more complicated for private equity houses looking to sell an asset. By selling the asset to a secondaries fund, the private equity fund can raise liquidity that it can return to the original investors.
The third-most popular strategy and the second-fastest growing, is technology. “Technology-focused fund launches have hit a five-year high in 2025,” said the report. “With rapid advances in AI over the past 12 to 18 months, it will be no surprise that technology remains a top investment focus.”
With global trends driving the growth in private funds, Cayman is well-placed to benefit. “Managers continue to choose the Cayman Islands for private fund establishment, attracted by solid legal and regulatory frameworks which adhere to recognised international standards, while providing a stable foundation for innovation,” said the report.
Related Videos
