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Fund and company registrations continue to climb

The Cayman Islands added net 66 more hedge funds (0.5% increase) and 205 private funds (1.4%) in the first quarter of the year. At the end of March, there were 12,785 mutual funds and 14,984 private funds registered with the Cayman Islands Monetary Authority, amounting to 27,769 funds.


Last year, the total of both mutual funds and private funds saw record increases, jumping by 7.4% and 15.6%, respectively. The performance of hedge funds, which on average returned 10.3% during the year, fuelled the demand for new funds.


In the first three months of 2021, the performance of hedge funds has been mixed with some benefiting from commodity price increases, while others struggled with the geopolitical disruption caused by Russia’s war in Ukraine, related sanctions and general consumer price inflation.


Nevertheless, industry association AIMA believes hedge funds remain resilient despite the prevailing headwinds.


Citing a growing performance dispersion across the industry, AIMA noted that confidence levels of fund managers reported in its surveys remain firm.


But regulatory and compliance challenges across the industry have intensified, in particular for private funds, following a series of proposals announced by the SEC in March.


“If approved in their current form, they would represent a serious overhaul of existing market practices, with potentially disruptive consequences,” AIMA said.


Company, partnership registrations climb further


The first two months of company registration activity continued the record-setting trend of 2021 by adding net more than 1,500 companies in January and February.


The 2,611 new company formations were only slightly offset by 1,049 company terminations during the period.


Last year a record number of new formations led to a 4.9% increase in the total number of registered companies, to just under 17,000 registered entities.


The number of new formations trails the first two months in 2021 and 2018 but is the third highest on record.


In 2021, new partnership registrations also saw a record year with 5,787 additions, which brought the number active partnerships reach a new high of 34,343.


The first two months of 2022 were the highest on record, with 918 new partnership formations, compared with 862 during the same period in 2021. At the same time, 284 partnerships were terminated.


Banking decline continues


The number of retail and offshore banks and trust companies dropped by one, to 100. If nominee trust companies and remittance services providers are included, the total number of licensees in the banking sector is 123, also down by one from the end of 2021.


Source: Cayman Compass


IMS is one of the longest established company management firms in the Cayman Islands. IMS is licensed by the Cayman Islands Monetary Authority to provide independent directors, company management and incorporation, mutual fund administration, captive insurance and trust services. For more information about our services, please contact us.


Disclaimer: this publication does not constitute legal or professional advice and should not be relied on as such.

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