Cayman Islands Trends & Insights: Open-Ended Funds Report 2025

The Cayman Islands Remains the Leading Jurisdiction for Open-Ended Fund Formation

As of 31 December 2024, the Cayman Islands maintained its position as the world’s premier jurisdiction for open-ended fund formation, with 12,858 funds registered under the Mutual Funds Act. The jurisdiction’s enduring appeal is underpinned by its robust legal framework, tax neutrality, and commitment to best practice in fund governance and investor protection.

Key Insights from the 2025 Report

• Dominant Investment Strategies: Equity strategies continue to lead, with 34% of new open-ended funds launched in 2024 employing equity-based approaches such as long/short equity and equity long-only. Macro, multi-strategy, and fund of funds structures also remain prominent, reflecting the market’s diversity and sophistication.
• Evolving Fund Structures: The traditional “classic” master-feeder model is being replaced by more cost-efficient single-legged and double-legged master-feeder structures, particularly among Asian and European managers. Stand-alone funds are also increasingly popular, and the Cayman exempted company remains the vehicle of choice for both feeder and master funds.
• Independent Governance: Industry best practice now demands independent oversight. In 2024, 70% of new corporate funds appointed all or a majority of independent directors, while partnership structures are increasingly introducing independent governance at the general partner level. Outsourcing of AML officer roles to independent service providers is also standard, especially for larger managers.
• Fee Arrangements and Liquidity: The “2 and 20” fee model is no longer dominant. Most management fees are set below 2% per annum, while the 20% incentive fee rate remains standard. Over three-quarters of funds launched in 2024 offer monthly or quarterly redemptions, with the vast majority requiring a notice period of three months or less. Redemption gates and lock-up periods are common, providing flexibility and protection for both managers and investors.
• Innovation and Adaptability: The sector continues to evolve, with 14% of new open-ended funds expressly permitting investment in digital assets. There is a growing demand for tokenised funds and the integration of artificial intelligence and ESG considerations, reflecting the industry’s commitment to innovation and meeting the needs of a sophisticated investor base.

Looking ahead: the future of Cayman Islands Open-Ended Funds

The Cayman Islands open-ended fund industry is exceptionally well-positioned to navigate ongoing market volatility and regulatory change. With its advanced legal infrastructure, political stability, and focus on operational excellence, the jurisdiction remains at the forefront of global fund trends. The report also explores the increasing adoption of technology-driven solutions, the rise of digital asset strategies, and the growing importance of independent governance and transparency.

Read and explore the full Cayman Islands Trends & Insights: Open-Ended Funds Report 2025 below

Access comprehensive data, expert analysis, and practical guidance to help you stay ahead in the evolving world of open-ended funds. Whether you are a fund manager, investor, or service provider, this report is an essential tool for understanding the latest trends and preparing for the future of fund management in the Cayman Islands.