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27 Mar 2007

Cayman Islands & Hedge Funds

Approximately 80% of the world's hedge funds are believed to be domiciled in the Cayman Islands. As a result, Cayman Islands hedge fund companies and service providers, such as law firms, accounting firms, and administrators, are employing innovative recruiting techniques to attract and retain professionals.

Some representatives from Cayman-based firms, such as Maples and Calder, KPMG, and Walkers, are talking from their own experience about the new topics on the Cayman agenda, such as onshore vs. offshore employment, how working in offshore financial centers seem to be a preferred career move for hedge fund professionals.

Incentives such as weather and lifestyle are attracting employees to the Caymans, a sophisticated work and family support system encourages them to stay. There have also been recent programs set up by the Cayman private sector firms, aimed at employing local citizens to work in the financial sector.

Hedge funds returned some 13% in 2006, compared with the 15.8% return of the S&P 500 Index, according to industry tracker Hedge Fund research, Inc. of Chicago.

Email me or leave a comment if you want more info on contacting these people, the hedge funds listed above have offered to speak or give advice on moving to the Caymans.

British Hedge Funds Back Up TCI In Dutch Bank Attack

ABN Amro Holding NV said last week it was in preliminary discussions with Barclays about creating a company worth more than $160 billion, this comes after pressure from activist hedge fund TCI asking to split up of the Dutch bank.

Activist hedge funds Polygon and Centaurus are said to be supporting TCI's demands and have also built a stake in ABN in order to pressure the bank into the sale.

The Children's Investment Fund Management(TCI), a $3.8 billion hedge fund, announced in a letter to Dutch bank ABN AMRO last month that they believe the bank is undervalued and should sell some of its assets, merge with another bank, or even sell off the whole business.

In 2005 TCI was part of a group of activist investors who criticized Deutsche Börse for its $2.5 billion bid for the London Stock Exchange, eventually causing Werner Seifert, the chief executive to resign. It turns out TCI, which owned 8% of Deutsche Börse, actively recruited some powerful partners, including Atticus Capital, Merrill Lynch, and Fidelity Investments, in order to facilitate the move. Centaurus is one of the activist shareholders that was embroiled in a dispute with Dutch companies Stork NV and Royal Ahold NV last year, and Polygon Investment Partners is a British equity fund that was involved in the sale of Dutch publisher VNU.

TCI said, "We believe that this strategy would not only create significant shareholder value but also would best serve all the stakeholders who otherwise would suffer over the long term from the structurally declining competitive position of ABN AMRO,......In 2006 they again committed to cut costs and they have so far failed to deliver," the hedge fund said.