In the current competitive hedge fund marketplace the use of side letters between investors and funds has become commonplace. Side letters are used by funds and fund managers to draw in investors who jockey for the most favourable terms possible.
The Cayman Islands has for decades been one of the world’s leading banking and financial centers, currently ranking as the fifth largest banking centre worldwide, with over 200 banks, including 40 of the world’s 50 largest banks, and over US$1.5 trillion in assets.
The American private fund industry is a significant representative of Wall Street’s interests and regulating hedge funds was a politically sensitive undertaking since the inception of the industry
All investment management firms need to pay very careful attention to a recent paper issued by the UK’s Financial Services Authority (FSA) concerning the management of conflicts of interest between asset management firms and their customers.
The investor due diligence process has evolved with the growth of the hedge fund industry. What was once a short and rather perfunctory process has grown into one which today is highly quantitative and detailed.
With the global hedge fund industry transitioning into a new era of heightened regulation and stricter fund governance, the Cayman Islands are extremely well placed to respond to the associated challenges.
European regulators will decide early this year whether UCITS funds should be reclassified as “complex” and “non-complex” products in order to improve transparency of information about investment strategies.
It is universally accepted that it is not possible for such large amounts of money to be mobilized by efforts of the public sector alone. A step change in the current state of climate finance with the inclusion of the private sector is essential to achieving this. A metaphorical revolution in climate finance is needed.
The recently court appointed principal liquidators of a Cayman Islands registered Madoff feeder fund, Herald Fund SPC (In Official Liquidation), immediately began a ‘hearts and minds’ campaign aimed at establishing trust with the trustee.