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Cayman Islands enjoy the sunshine
01 June 2008
The subprime crisis has finally brought home to hedge funds that they have to manage their counterparty risk.
As a result, hedge funds have been transferring spare assets from their prime brokers to custodians, writes James Norris
The subprime storm may be buffeting the world's financial markets, but the Cayman Islanders are basking in an oasis of calm. Fund registrations, far from dropping as a result of the credit crisis, as was initially feared, have continued their growth, making prospects for this year look distinctly rosy. And the only concern on the minds of the authorities is how they are going to cope with an anticipated surge of institutional money that will test its legal, custody and funds administration infrastructure to the limits.
The Cayman Islands' funds business is well established, and with it the infrastructure of specialised auditors, fund administrators, custodians and lawyers that services the funds. That the Caymans are now widely regarded as the domicile of choice for hedge funds is in large part due to this network of experienced professionals, working together within a well-established legal framework. For custodians, the Caymans are an...
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