RSM
China, Europe and beyond: emerging trends and looming challenges Interview with Alex Bodden
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egarded as one of the core financial services leadership bases within the global RSM network, RSM Cayman offers a range of audit, tax and consulting services to the fund management industry in the Cayman Islands. Originally established in 2003 RSM Cayman , the firm – which forms part of the global RSM network of independent accounting firms, the 6th largest globally – is at the forefront of Cayman’s continually evolving investment management industry. With Cayman very much the jurisdiction-of-choice for the international offshore hedge fund industry, the firm specialises in providing services to all forms of structures for a global client base. In a wide-ranging interview, Alex Bodden, Managing Partner at RSM Cayman, explores the key emerging trends in the domicile – from the growing business opportunities offered by the burgeoning Chinese fund management industry to the looming challenges posed by sweeping global regulatory reforms. How important is Cayman in the context of the global hedge fund industry? Where are you seeing new growth in your business? “Cayman certainly acts as an industry hub, and at RSM we work both within that industry hub and as a hub within RSM as far as the services that we provide to our clients. Typically, the CAYMAN ISLANDS | Apr 2020
managers for our clients are located elsewhere in the world across all the major jurisdictions, and the fund administrators are also located both here and elsewhere in the world. “Our clients range in size – from small million-dollar NAV managers to multi-billion dollar NAVs – and they’re also spread across all types of structures, investment strategies, and asset classes. “Geographically it’s global, but a significant proportion of our work is US-based or US-generated. But we have clients in London, in Hong Kong, Singapore, Australia, New Zealand, India, South Africa, South America, and Canada. We have a global reach in terms of our clients’ footprint and location. “Obviously, there is a heavier concentration in the main asset management jurisdictions: the US, the UK, Hong Kong and Singapore, but we are also starting to get more and more inquiries from China – either directly from China itself or through our Hong Kong and Singapore offices. Cayman has definitely seen its fair share of opportunities coming out of China in terms of fund structures.” What’s driving that inquiry? “A number of factors. There’s a gradual, growing sophistication in the Chinese investment industry and a general acknowledgment of the benefits of offshore vehicles to access investor pipelines. They are definitely
becoming more sophisticated and catching up with the rest of the industry and adopting the products that are already used around the world. “At RSM we’ve got a very good firm with deep capability in China, supported by a very good RSM presence in Hong Kong and Singapore, with large China desks and operations from those two jurisdictions into mainland China. We’re seeing very much an increased level of activity and inquiries across both open- and closed-ended funds to access capital for investments in China, be it through hedge funds or PE offerings. I would imagine if you spoke to all the other major firms they would be saying something similar – I think in general the industry is seeing a definite growth in activity from that region and certainly from China.” While China offers opportunities for Cayman’s fund industry, Europe is arguably presenting some major challenges for the jurisdiction at the moment, specifically on the regulatory side. How has the regulatory environment changed? “It’s very topical at the moment, but you must step back and look at the history and evolution of the enhanced regulatory environment, and the ever-growing regulatory demands on the industry and in jurisdictions such as Cayman in general over the last few years. “The whole world is subject to an ever-increasing enhanced regulatory www.hedgeweek.com | 15
