Number of private funds domiciled in Cayman Islands soars 40% in five years

The number of private funds domiciled in the Cayman Islands has increased by 40% since the end of 2020 – when the Private Funds Act was introduced – up from 12,695 to 17,722 at the end of 2025.

In the year to the end of 2024 the number of funds has increased by 430 as the Caymans’ fund sector continues to expand driven by growing demand for private credit fund-raising, the Cayman Islands’ financial services industry association, Cayman Finance, reports.

The association attributes the demand to private credit managers filling the funding gap with bespoke financing solutions following banks’ retreat from middle-market lending post 2008.

Private equity also remains foundational to Cayman’s fund sector, the association notes, 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 jurisdiction is now home to 30,598 funds, including 12,876 mutual funds; hedge funds are typically registered as mutual funds under Cayman's regulations. Cayman funds managed US$16trn in total assets at the end of 2024, with a net asset value of US$9.1trn.

In terms of geographical demand, data from the US Securities and Exchange Commission shows the jurisdiction accounts for approximately 32% of US private fund net assets. Cayman funds are also popular in Japan, where institutional investors hold over $645bn in overseas allocations, with approximately 80% of those funds flowing into Cayman-domiciled funds.

Cayman funds with investment managers in the UAE have seen a 200% year-on-year increase in NAV between 2023 to 2024, up from $26bn to $78bn. 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’s fund sector has recorded strong year-on-year growth as it cements its position as the domicile of choice for investment managers.

“The latest figures reinforce what we’re seeing across the market. 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.”

“As private credit, continuation vehicles and hedge fund strategies continue to evolve, Cayman’s flexibility and global credibility position it to support the next phase of 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."