Q: How does Cayman help Chinese investors with overseas investment?
A: The Cayman Islands actually is a great premier global financial hub. So what it does is it efficiently connects law abiding users and providers of investment capital and financing from around the world benefiting developed and developing countries. Where it works really well is we’re really an extender of value for countries such as China. So it allows China itself, businesses in China, or individuals to access investment financing opportunities globally through the Cayman Islands.
In addition to that, because the Cayman Islands is home to about 70 percent of the global hedge funds, that also means there’s a huge amount of pooled investable capital in Cayman that’s available to be supporting the inward investing as well as supporting IPOs for Chinese businesses and maybe listing in the Hong Kong stock exchange, as well as when we look at the Belt and Road Initiative, Cayman has been uniquely positioned to support that. Whether it’s direct investing or accessing financing it’s able to actually connect China with this large pool of investable capital from the global marketplace.
You know you mentioned earlier the Belt and Road initiative, that’s an area that Cayman is very, very well positioned to support in. In particular when we look at the Belt and Road initiative that’s connecting multiple countries around the world, one of the strengths of Cayman is its efficient neutral platform. So we as a matter of course on a daily basis are dealing with thousands of clients around the world from different countries, different laws, different regulations, different tax rules, allowing them to transact in a very neutral but trusted environment.
And so as we look at the types of transactions, the type of investment capital, and infrastructure transactions that are going to be taking place going forward, Cayman is well positioned to be supporting China as well as the other countries that China is working with, to be able to access that global capital in a way that is sensitive to the different requirements that are necessary for each of the countries. So we’re very happy to be playing that role now when we see Cayman as a primary jurisdiction that’s being used now, and we just expect that to accelerate as China continues to expand its Belt and Road Initiative.
Q: Apart from China, how much demand is there from other Asian jurisdictions?
A: We also, for example, in the Japanese market, we’re the primary jurisdiction for Japanese pension funds. Investing through Cayman entities, generally they’re going to be a unit trust as the preferred structure for it. But again, being able to access that global talent of investment, manager expertise etc., to derive strong returns for them. Also when we look at India, Cayman is really emerging as a top jurisdiction for supporting foreign direct investment into India and we’re seeing those trends replicating in other jurisdictions around Asia as well.