(CNS): The funds sector had another good year in 2025 following five years of growth. The Cayman Islands Monetary Authority registered 17,722 private funds in this jurisdiction last year, a 40% increase on 2020, when legislation was introduced to mandate registration, annual audits and formalised oversight mechanisms. Cayman is now home to more than 30,000 funds, including 12,875 mutual funds and US$16 trillion in assets are held under management in the Cayman Islands, the largest offshore funds domicile.
Cayman Finance, the offshore industry association, said in a press release that Cayman’s fund sector has expanded rapidly in recent years, in step with growing demand for private credit fundraising. As banks retreated from middle-market lending post-2008, private credit managers filled the funding gap with bespoke financing solutions.
“Private equity also remains foundational to Cayman’s fund sector, but structures have continued to evolve, particularly through the increased use of continuation vehicles and other hybrid approaches that combine primary commitments, secondary purchases and co-investment rights,” the organisation stated in a press release.
With well over 30,000 funds here, including 12,876 mutual funds, as hedge funds are typically registered here under local regulations, amounting to more than US$16 trillion in net asset value, Cayman’s status as the world’s leading offshore domicile has been solidified. Data from the US Securities and Exchange Commission shows the jurisdiction accounts for almost a third of US private fund net assets.
Cayman funds are also popular in Japan, Cayman Finance said, where institutional investors hold over $645 billion in overseas allocations with around 80% of those funds flowing into Cayman-domiciled funds. In terms of net asset value (NAV), Cayman funds with investment managers in the UAE have seen a 200% year-on-year increase from 2023 to 2024, from $26 billion to $78 billion. Cayman funds, which are managed by investment managers in Brazil (22%) and Singapore (21%), have also seen significant growth in net asset value.
Samantha Widmer, Director and Head of Funds and Capital Markets, Cayman Finance, said Cayman has cemented its position as the domicile of choice for investment managers.
“The latest figures reinforce what we’re seeing across the market,” she said. “Cayman combines tax neutrality and English common law certainty with a robust, commercially practical regulatory framework. Since the introduction of the Private Funds Act, the jurisdiction has strengthened institutional confidence through consistent oversight, while still delivering speed to market through streamlined processes and a deep bench of experienced service providers.”
Widmer added that, as private credit, continuation vehicles and hedge fund strategies continue to evolve, Cayman’s flexibility and global credibility position it to support further investment growth. “Virtual asset strategies and tokenised funds present new structural opportunities, with Cayman already hosting approximately 58% of crypto and digital asset hedge funds globally,” she stated.
New fund registrations softened slightly in the final quarter of 2025, as global private equity fundraising conditions remained challenging amid fund de-registrations that typically occur at year-end. But Cayman Finance said this moderation has been partly offset by renewed demand for hedge fund strategies.
The size of the global hedge fund industry increased by about $628 billion in 2025 to exceed $5 trillion. Cayman hosts more than 75% of the world’s offshore hedge funds, with 54% of all net assets reported to the SEC being managed in Cayman-domiciled funds.
