Conyers Investment Funds Report | Q1 2025

Cayman Segregated Portfolio Companies (SPCs) are popular vehicles for use by investment funds. As many readers will be aware, SPCs are different from typical Cayman Islands companies in that the assets and liabilities of each segregated portfolio (SP) are segregated from each other during the life of the SPC (and in liquidation). In late 2023, in the case of Holt Fund SPC, the Grand Court of the Cayman Islands ordered the first appointment of Restructuring Officers over particular segregated portfolios of an SPC.

A Segregated Portfolio Company (SPC) provides for the protection of the assets held under one portfolio by ring-fencing them from the liabilities of other portfolios in the same company. Whilst structures similar to the Cayman Islands’ SPC have been replicated in other jurisdictions, including those onshore, Cayman has the distinction of having built up a body of definitive case law examining the segregated portfolio principle. This is important in light of the significant numbers of SPCs in operation in Cayman.

Cayman Islands investment funds are considered “Financial Institutions” and as such have direct obligations under the Cayman Islands Tax Information Authority’s Common Reporting Standard Regime. This article provides a detailed overview of the requirements and implications of these regulations.

The Cayman Islands Stock Exchange (CSX) facilitates the trading of diverse securities, including investment funds (both open-ended and closed-ended), corporate and retail debt, eurobonds, equities (domestic and international), derivative warrants, and Segregated Portfolio Companies (SPCs).

Setting up a tokenised investment fund with an approved manager in the British Virgin Islands offers many strategic advantages by combining the innovative benefits of blockchain technology with cost-effectiveness and the operational efficiencies of the BVI’s financial services regulatory framework. In this article Hong Kong Senior Associate Flora Zeng explores the benefits of tokenised investment funds and the BVI approved manager regime.

The Cayman Islands are home to 118,443 active companies as of 31 December 2024, with 11,819 new companies registered in 2024 and a further 1,081 in the first two months of 2025. This factsheet outlines the reasons for the Cayman Islands’ popularity as a jurisdiction to structure international transactions.

The regulatory environment for Cayman Islands investment funds has changed significantly over the last few years as the jurisdiction has updated its funds regime to remain compliant with international standards of the European Union and the Financial Action Task Force. While there are significant benefits to operating a private fund in one of the world’s leading offshore funds jurisdictions, fund operators should take steps to ensure that they comply with their regulatory obligations when operating a Cayman private fund so as to avoid administrative fines or enforcement action by CIMA.