Asserting Cayman’s position in Alternative Investments beyond funds

Insights from Camana Bay’s financial services community

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Changing market dynamic s, increased investor awareness – particularly in emerging markets – and the global connectivity of today’s financial community are redefining investment opti ons well beyond the commonly held assets of stocks, bonds or fixed income products.    

Alternative forms of investments are being developed as both individual and institutional investors continue to seek solid returns, particularly in the midst of today’s challenging global economic environment.

While the Cayman Islands financial services sector’s reputation within the alternative investment sector is typically associated with hedge funds, the jurisdiction is also showing its strength in other lesser-known areas such as unit-linked investments and various types of trusts.

Experts from the financial services community based in Camana Bay that are on the front lines of developing and managing these innovative investor products discuss their experiences bringing these solutions to international markets from the Cayman Islands.

Targeting emerging markets

Investors Trust Assurance SPC (ITA) is an international insurance company formed in 2002 that has gained a leadership position in offering alternative investments to a niche market. ITA provides investors in emerging markets a core product portfolio comprised of unit-linked insurance policies.

These policies are characterised by a single premium payment or regular contributions over many years, and are devised to allow policyholders access to name-brand investment products in stable currencies which allow them to build assets over the long term.

ITA was formed from an identified need to provide products and services to investors in emerging markets, where there have traditionally been a lack of quality local pension systems, or limited access to global investment products.

While its initial focus was on Latin America, ITA has since branched out over the years to Asia Pacific. In addition to providing an easily accessible, stable and quality product, ITA has identified some key market factors that have contributed to its growth in emerging economies.
 

“The vast and growing middle class in emerging markets are, for the first time, opening up opportunities for individuals in these countries to plan for retirement or their children’s education,” said Ian Phillips, President, ITA Global Trust. “The financial crisis has also led to additional interest by wealthy individuals in the insurance sector as an option to consider in their wealth management strategies. Given ITA’s target markets and product portfolio, we are in an ideal position to help these investors reach their goals.”

Cayman as a global base of operations

ITA’s success also demonstrates how globally connected the financial community has become and the opportunity for Cayman Islands firms to serve as the base for global operations, particularly for alternative investments. Phillips identified a number of advantages afforded to ITA in that regard.

“In today’s financial and regulatory climate, investment advisors and clients are more mindful of the jurisdiction in which financial services companies are based,” he said. “The Cayman Islands has a robust regulatory regime and a history of attracting the best talent from around the world.”

Phillips also cites proximity to Latin America, as well as Cayman’s sophisticated technology gateway, which enables ITA’s e-platform to provide client service in virtually all time zones across the globe.

Looking towards the future

With a truly global mindset, ITA is keen to build on its success in emerging markets.

In addition to unit-linked products, the firm also offers fixed income and index-linked products for clients wishing to protect capital.

Phillips said these products have seen a significant increase in demand recently, which has prompted ITA to further develop its offerings. A portfolio bond is under development, which will allow ITA’s clients to increase their investment diversification to suit their individual risk tolerances.

As part of the ITA Group, ITA Global Trust Company Ltd and ITA Global Securities Ltd, both offer sophisticated solutions for clients that require a broader range of wealth management.

“As we embrace emerging markets, we must be versatile and meet our clients’ changing needs, something that ITA is in a prime position to do,” he said.

 

Ian-Phillips-Mug

Ian Phillips President ITA Global Trust Company Ltd