Fund industry figures in the Cayman Islands have hit back at claims the Caribbean territory will “wither on the vine” as a domicile for alternative investment funds.

FTfm last week reported predictions by London-based Tiburon Partners and RWC Partnersthe Caribbean territory would suffer as funds and assets are increasingly switched to European Newcits funds.

Figures from Hedge Fund Research suggest the proportion of hedge funds domiciled in the Caymans has fallen to 37.3 per cent, from 40.1 per cent at the end of 2008.

However Anthony Travers, chairman of Cayman Finance, a trade body, said 9,500 hedge funds were still domiciled in the territory, only 5 per cent below the peak, recorded in 2008.

Moreover, Mr Travers said new fund registrations were running at 100 a month, outstripping terminations of 40-50, putting the territory on track to exceed its previous high water mark by next year.

“To say Cayman is dead in the water in nonsense,” said Mr Travers, who added 80 per cent of the territory’s fund assets are held by US and Asian investors.

However, some posters to a Caymans News Service report based on the FTfm story said industry employment levels were declining.

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