Cayman law criticised on hedge fund ruling

| 29/04/2010

( The decision to strike out court proceedings, launched with the aim of forcing the winding up of a Cayman-based hedge fund, has been criticised by Laven Partners. The firm has said the Cayman Islands Court of Appeal’s decision over Camulos Partners Offshore Limited represented an imbalance in the law of the Caribbean nation. Jerome Lussan, chief executive of hedge fund consultancy at Laven Partners, said numerous funds were crippled by the effects of the credit crunch and its impact on securities markets.

"This is largely because many investors lost confidence and wished to redeem their positions. Such people are now desperate to contest the unfair decisions of funds to suspend NAVs or not to repay shareholders by suspending or gating redemptions at the last minute,” he said.
 Lussan said Cayman law seemed more protective of the rights of the funds compared with investors and added: "The ruling in favour of the fund manager is a lost opportunity for the Cayman Islands. It will lead to a demand for funds in stronger jurisdictions, such as Luxembourg, where company law and regulations are more likely to be protective of investors’ rights.”
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