CIMA reveals state of fund sector in 2009

(CNS): The Cayman Islands Monetary Authority (CIMA) released the 4th annual Investments Statistical Digest, Friday which compiles data of approximately 7,000 regulated funds in the Cayman Islands for 2009. The information which is now more than sixteen months old is described by CIMA as providing a snapshot of the industry’s response to the global financial crisis. CIMA said the report revealed that for funds that filed a 2009 FAR there was a 147% increase in net income, from a net loss of US$429 billion in 2008 to US$203 billion in 2009, a positive development for the sector.

“The Digest demonstrates an increasing stabilisation in the market during 2009,” the Cayman Islands Monetary Authority said. “It shows an uptick in positive returns and an aggregate ending net asset value of US$1.561 trillion for the funds captured in the Digest.”

The Digest draws data from the Fund Annual Return (FAR) submitted to CIMA by 6,938 funds that had a financial year-end falling within the 2009 calendar year. This was almost three-quarters of all funds regulated in the Cayman Islands as at the end of 2009.

The statistics for 2009 showed some of the negative effects of the crisis that continued in that year. The US$1.561 trillion aggregate ending net asset value was 8% less than the ending net asset value for 2008. Total assets, at US$2.176 trillion, were 13% less than for 2008. The 20% decrease in redemptions from 2008 reflected a slowing of the number of investors leaving funds, but this was not enough to offset the 41% fall in subscriptions, which reflected investors’ continued caution in 2009.

Commenting on the data, CIMA’s head of investments and securities division, Yolanda McCoy, said that 2009 was a turnaround on 2008. “Collectively, Cayman-domiciled funds were successful in 2009, turning around some of the negative results from 2008. Although asset values and subscriptions were down, the strength of the industry is seen in the significant increases in net income and return on assets. Overall, Cayman domiciled funds remain resilient, with performance rebounding as anticipated,” she added.

Among the aspects unchanged was the low proportion of funds having to suspend trading  which stood at 7% in both 2008 and 2009. Following trends seen in all years of the publication of the Digest, two investment strategies, Multi-Strategy and Long / Short Equity, remained dominant, attracting 37% and 22% of assets, respectively.

Only two strategies showed an increase in the net assets allocated to them: Global Macro, which saw a 21% increase in net assets, and Distressed Securities, which saw a 22% increase. The dominant operating structure remained the Master/Feeder, whilst under the legal structure the Exempted Company continued to be the structure of preference.

“This aggregate statistical data that we are able to collate and publish in the Digest provides invaluable information,” said Cindy Scotland, CIMA’s Managing Director. “Not only does it give us as regulators a better understanding of the viability and developing trends of the industry as it evolves year to year, it extends the transparency of the industry to all stakeholders who have a vested interest.”

The 2009 Investments Statistical Digest can be downloaded in its entirety here