Cayman should expect Hedge Fund decline
The Cayman Leader of Government Business, Kurt Tibbetts has warned that the Cayman Islands is not likely to escape the fall-out from the financial crisis in the US, particularly because the majority of the world’s hedge funds have registered in the jurisdiction. Many the world’s hedge funds are heavily exposed to the debt instruments.
On October 9, Tibbetts said that notwithstanding the interventions of the United States’ government, the financial markets are still far from back to normal. He noted that the economy of the jurisdiction does not operate in isolation.
While the retail banking sector in Cayman is functioning close to normally, hedge funds and structured finance are the areas that are expected to suffer most. According to Tibbetts, there could be a big decline in the number of new fund and business formations the next year. Some experts are predicting that the number of hedge funds in the world could decrease by 20-30%, which will by all means affect Cayman’s business.