Event recap: Mainstream Breakfast Session on Demystifying Cayman Funds
Over 80 fund managers and service providers attended the Mainstream Breakfast Session at Sydney’s Establishment Ballroom on 10 September 2019 to hear a panel discussion on “Demystifying Cayman Funds”.
Mainstream’s Group CEO, Martin Smith, opened the discussion by presenting key facts and figures about the Cayman Islands and why they remain such a popular offshore domicile.
James Gaden, Antoinette Elias, Fadi Khoury, Martin O’Regan and Nick Happell.
This was followed by a panel discussion featuring industry experts Martin O’Regan (Managing Director, Solas Fiduciary Services), Antoinette Elias (Oceania Wealth & Asset Management Sector Leader, EY), James Gaden (Partner, Walkers) and Fadi Khoury (Partner, Corrs Chambers Westgarth) and moderated by Nick Happell (Asia-Pacific CEO, Mainstream Fund Services).
In “demystifying” Cayman, the panel looked at debunking some key myths about Cayman funds.
There is a common misconception that Cayman funds are not subject to regulation. In fact, Cayman has strategically and thoughtfully developed its position as the pre-eminent offshore jurisdiction in large part due to specific laws, transparency and compliance.
Cayman funds must comply with strict anti-money laundering and governance requirements that reflect global best practice. These regulations are largely geared towards institutional investors as the Cayman Islands is generally not a retail fund jurisdiction.
Cayman has very user friendly laws, based heavily on English common law, providing comfort to investors and fund managers alike. One of Cayman’s strengths is its repeated early adoption of anti-money laundering laws and know your client regulations. Cayman has been assessed as ‘highly compliant’ by the Financial Action Task Force and, in fact, is more compliant than many OECD member jurisdictions. Cayman’s commitment to working with governments and international authorities over many years has ensured it is trusted as a well-regulated, cooperative and transparent jurisdiction.
All the panelists agreed that when considering setting up a Cayman fund, there are two key questions for fund managers to consider:
1. Who are your investors?
2. Where are your assets?
If the answer to both of these questions is offshore, then a Cayman structure could make sense for your fund. Many international investors are already familiar with the jurisdiction, which means from a marketing perspective that half of the work is already done.
The panel members also discussed the pros and cons of running parallel funds in Australia and Cayman, advising that this can be done but there are additional costs and potential tax consequences that mean proceeding with caution.
It remains clear from the discussion that Cayman remains a ‘tried and true’ offshore jurisdiction for fund managers.
- Learn about Mainstream’s Cayman services
This article is not intended to be financial advice and is of a general nature only that does not take into account your individual objectives, financial situation or needs. While all efforts have been made to ensure the information contained in this article is accurate, errors may occur.