Cayman Islands Funds Group

The Cayman Islands is the principal offshore jurisdiction for private equity funds. It is attractive as a domicile for funds because it is supported by a fully-developed business law, an English-based legal system and a regulatory and professional infrastructure capable of implementing large and complex international business transactions.

As closed ended funds are not regulated by CIMA, it is not possible to identify the number of funds launched as closed ended funds.  However, the most popular vehicle for such funds is the exempted limited partnership, 44% of which were formed and established by Maples and Calder in the Cayman Islands in 2010.

Members of our Cayman Islands Funds Group are based in our Cayman, London, Dubai and Hong Kong offices:

  • Our Cayman office focuses primarily on the North American market and also houses our Latin America Group, which provides investment on all aspects of private equity funds.
  • We have significant expertise in relation to Shariah Law compliant private equity products, in particular in our Dubai office.
  • Our Hong Kong office funds group has particular expertise in private equity products preferred by Asian investors.
  • Our London office primarily services the need of our European based clients. It is at the forefront of  developments affecting private equity funds under the European Union Alternative Investment Fund Managers Directive.

Setting up a private equity fund in the Cayman Islands offers a number ...

  • Speed and simplicity of establishing Cayman entities.
  • Relatively low cost of doing so, particularly in the context of typical transaction sizes.
  • Flexible and practical business statutes.
  • Cayman insolvency law is simple and effective, and hence of great appeal to lenders.
  • Robust and healthy compliance culture.
  • English-based legal system, established judiciary and absence of political or sovereign concerns.
  • Professional infrastructure and reputation. Cayman is well-known for its established and experienced financial services sector and substantial capacity.
  • Compliance with international anti-money laundering, anti-terrorist financing and other financial regulatory standards.
  • Significant number of international tax information exchange agreements and OECD ‘white list’ status.
  • Tax and exchange control neutrality.
  • The service-providers to the fund (investment managers, advisers, brokers, administrator, etc.) may be located anywhere in the world.

There are three main fund structures:           

Exempted Limited Partnerships. The exempted limited partnership concept tracks its Delaware equivalent and is therefore very popular with United States promoters and their advisers. Closed-ended/private equity funds are most commonly established in Cayman as exempted limited partnerships.

Companies. Companies are invariably incorporated with limited liability. The limited liability company is only used occasionally for private equity funds.

Unit Trusts. The unit trust has been a popular vehicle for many years and Cayman trust law essentially follows English trust law whereby unit trusts are established under a trust deed giving unit holders undivided beneficial interests in the trust property. Unit trusts are often used (in place of companies) for investors in jurisdictions where participation in a unit trust is more acceptable or attractive than shares in a company.

Contacts

BVI

Maples and Calder Cayman Islands
Kieran Walsh
work +1 345 814 5353

Cayman Islands

Maples and Calder Cayman Islands
Jon Fowler
work +1 345 814 5526
Maples and Calder Cayman Islands
Iain McMurdo
work +1 345 814 5378
Maples and Calder Cayman Islands
Henry Smith
work +1 345 814 5528
Maples and Calder Cayman Islands
David Brooks
work +1 345 814 5534

Dubai

Maples and Calder Dubai
Tahir Jawed
work +971 4 360 4071

Dublin

Maples and Calder Dublin
Barry McGrath
work +353 1 619 2029
Maples and Calder Dublin
Peter Stapleton
work +353 1 619 2024
Maples and Calder Dublin
Stephen Carty
work +353 1 619 2023
Maples and Calder Dublin
Paul Dobbyn
work +353 1 619 2025

Hong Kong

London

Maples and Calder London
Paul Govier
work +44 20 7466 1631

Singapore

Maples and Calder Singapore
Tom Katsaros
work +65 6922 8403

Our unparalleled overview of the funds market gives our clients an edge. We provide insightful, practical and prompt advice based on the latest legal developments and structuring trends.

Jon Fowler, Partner, Cayman