In Caymans, It’s Simple to Fill a Hedge Fund Board
Fund Board
BY AZAM AHMED
GEORGETOWN, Cayman Islands Just off the tarmac at the Grand Cayman International Airport, visitors were recently greeted by colorful banners advertising the Caribbean islands sunny offerings: waterfront seafood restaurants, tax-free shopping and hedge fund directors for hire.
In the last decade, as hedge funds ballooned in size and number to become a dominant force in the investing universe, directorship services have grown from a cottage industry into a big business on the Cayman Islands. Many funds run by United States money managers have their legal residence here for tax reasons. And because of a quirk in the islands tax code, these funds must appoint a board.
As a result, dozens of operations have sprouted up on the Caymans to supply directors, from one-man bucket shops to powerhouse law firms.
Directors are often Cayman-based professionals: accountants, lawyers and administrators of hedge funds.
They are rarely investors, though. Ostensibly, directors offer guidance and oversight to the funds. In return, a director is typically paid anywhere from $5,000 to $30,000 a year. With more than 9,000 funds domiciled on the tiny island, business is booming.
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http://dealbook.nytimes.com/2012/07/01/in-caymans-its-simple-to-fill-a-hedge-fund-board/
Must be nice work. Do nothing, get paid to live on an island.