With changes in Cayman Islands legislation related to private funds, regulation may be a catalyst for outsourcing certain functions previously maintained in-house.
However, the adoption of specialised outsourcing partners can actually enhance the managers' effectiveness and ensure a robust model for future growth, allowing managers to focus on "alpha-generating activities".
Relying on trusted outsourcing partners may become the norm for Cayman Islands private funds, which may well lead to a better offering in the long run.
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David "Tiger" Williams, founder of the equity execution service provider Williams Trading, observes how outsourced trading has provided emerging managers with added scalability. "Things on the outsourced side are not always necessarily regulatory driven – it can be cost-effective as it's more of a variable cost than a fixed cost and the pandemic has certainly opened people's eyes to the possibility of a more scalable workflow going forward."
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