Private funds flocked to Cayman in the second quarter of 2026, taking overall fund registrations in the jurisdiction to 31,145. As Cayman Finance noted in a press release, the growth cements Cayman’s position as the world’s largest tax-neutral fund domicile, with more than twice as many funds as Luxembourg, its nearest competitor.
The latest data from the Cayman Islands Monetary Authority shows the total number of Cayman-registered funds continues to climb upwards, with a net gain of 227 fund registrations in the second quarter.
But the lion’s share of the growth comes from the private funds segment, which rose by 222 registrations to reach a total of 18,132 funds. Mutual funds saw an increase of just five funds during the quarter, taking total registrations to 13,013.
Private funds boom despite private credit worries
It’s notable that private fund registrations in Cayman continue to grow despite negative sentiment that has dominated some corners of the international private credit sector over the last 12 months. Withdrawal requests at 20 private credit funds tracked by the Financial Times totalled more than US$22 billion in the second quarter. In particular, Blue Owl faced US$4.7 billion of redemption requests from its two flagship funds.
But while retail investors are clearly worried that some private credit funds have made bad loans, many institutional investors are more optimistic. Numbers from market data firm Preqin showed a big inflow of institutional money into some types of private credit funds in the second quarter of 2026.
Moreover, the authority doesn’t break down its private funds segment into specific fund types, so the 18,132 registrations also include private equity funds.
“Cayman added 547 new funds in the first half of the year, comfortably ahead of the 448 recorded in the whole of 2025,” said Samantha Widmer, director and head of funds and capital markets at Cayman Finance. “The growth comes from institutional investors increasing their private market allocations, greater demand for continuation vehicles and a steady flow of new hedge fund launches.”
Mutual fund numbers remain steady
In comparison to private funds, registrations of mutual funds in Cayman barely grew. There were 12,995 mutual funds registered in Cayman at the end of 2022, which means the total number has increased by just 18 over the last three and a half years.
The authority includes both traditional open-ended funds and hedge funds in its mutual funds segment. Cayman already has around 75% of the offshore hedge fund market, which limits the rate of potential growth.
That said, the recent outperformance of hedge fund strategies saw a net inflow into hedge funds in 2025 for the first time in recent years, which could lead to an uptick in Cayman registrations in future years.
Another area of potential future growth is tokenised funds. The 12 tokenised fund registrations are a tiny proportion of Cayman’s total, yet this is the first full quarter since Cayman introduced a package of legislative changes to clarify the regulatory framework for tokenised funds.
“Tokenisation is the newest fund trend and Cayman is well positioned to support these requests,” said Widmer. “Twelve tokenised funds are now registered with CIMA, and Fidelity’s decision to domicile its first tokenised fund here shows the legislative reforms are working as intended.”
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