Maples Group - Cayman Islands Trends & Insights: Open-Ended Fund - February 2026

Cayman Islands

Trends & Insights: Open-Ended Funds

February 2026 Report

The Cayman Islands remains the jurisdiction of choice for the establishment of offshore funds. With deep expertise, extensive experience and up-to-date insight into market trends, we are well placed to support clients in launching and operating their open-ended funds.

We hope you find the insights in this report valuable. For further information, please contact any of the individuals listed below, or your usual Maples Group contact.

Christie Walton Partner | Cayman Islands

+1 345 814 5349

christie.walton@maples.com

Ann Ng Partner | Hong Kong

+852 3690 7475 ann.ng@maples.com

Harjit Kaur Partner | London +44 20 7466 1655 harjit.kaur@maples.com

2025 in Review

Open ended fund formation in the Cayman Islands during 2025 was set against a market backdrop of stabilising performance and improving allocator engagement. As at 31 December 2025, there were 12,876 funds registered with the Cayman Islands Monetary Authority under the Mutual Funds Act, extending the long term growth since 2017 and confirming the jurisdiction as the leading offshore domicile for open ended funds. The Maples Group acts for approximately one third of these funds, offering a distinctive view of market trends. This report summarises the terms observed on open ended funds launched by the Maples Group in 2025.

Strategy mix at launch was broadly consistent with recent years, with equity strategies the largest cohort at approximately 31% of 2025 launches. Within equity, long/short remained the core approach, complemented by long only, growth equity and equity hedged variants. Fixed income and credit were the next most prominent category, while macro, multi strategy and fund of funds collectively comprised a significant share, reflecting opportunities created by dispersion across rates and credit and by relative value trading conditions. 17% of new funds expressly permitted investment in digital assets, continuing a measured but unmistakable rise in targeted mandates or sleeves with digital optionality.

Manager credentials also tracked the maturing profile of allocators: in 2025, the vast majority of launches featured a regulated investment manager, consistent with the multi year trend and reading at around 82% in the most recent data point. Manager geography remained anchored in North America, which accounted for about 56% of launches, with Europe and Asia Pacific continuing to build share as institutional participation deepened.

Manager demographics and governance practices evidenced steady—if uneven—progress. Only 17% of launches named at least one female key person, and only 3% had a majority of female key persons, highlighting ongoing focus areas for diversity at senior levels. Independent oversight continued to strengthen: among corporate funds launched, 83% included some independent directors, and 76% had boards that were entirely or

predominantly independent. For partnerships, 42% incorporated independent oversight mechanisms, often via independent committees or independent directors at the general partner level. In parallel, outsourcing independent AML officers remained the norm, with more than three quarters of funds appointing external AML officers.

Structures showed a clear bias towards scalability and cost efficiency. The archetypal “classic” master feeder (Cayman Islands corporate master with Cayman Islands corporate and Delaware partnership feeders) stabilised at about 25% of 2025 launches after recent declines, while single legged master feeder and stand alone funds each accounted for roughly a quarter, reflecting launch phase cost discipline and the ability to scale feeders as distribution broadens. Double legged Cayman feeders fell to around 5% of launches. Overall, corporate vehicles remained most common for new funds, followed by exempted limited partnerships. Feeder choices remained pragmatic by region, with enduring use of Cayman corporates in Asia and mixed corporate/partnership feeders in Europe to align tax and investor base segmentation.

Commercial terms continued to normalise around established institutional practice. The majority of new funds charged both management and incentive fees, though the traditional “2 and 20” construct is no longer dominant. Among funds charging a management fee, most set the rate below 2%. On incentive fees, the 20% rate remained the most common single point, and high water marks with loss carry forward remained standard, featuring in approximately 88% of funds charging incentive fees.

Liquidity frameworks remained closely aligned to strategy. Over 80% of funds launched offered monthly or quarterly dealing. Notice periods continued to cluster at one to three months, with 78% of funds within that range. Lock-ups were present in just over half of the launches, with a one year duration most common. Gates were present in 55% of launches, most commonly at the fund level. Consistent with the opportunity set in less liquid markets, side pocket powers featured in roughly 37% of launches overall and were particularly prevalent among Asia based managers, where nearly three quarters included such provisions.

Taken together, the terms and practices observed across Cayman Islands open ended fund launches in 2025 underscore a mature, resilient and investor centred ecosystem. Managers continued to prioritise scalability, governance and transparency, and investors gravitated to durable alpha delivered with clear alignment on fees and liquidity. Against that backdrop, the Cayman Islands remains the leading offshore domicile for open ended funds, with structures and practices that meet institutional requirements while enabling efficient growth.

We benefit from a level of market exposure that affords us a comprehensive understanding of both regional and international developments. This depth of insight enables us to provide clients with considered, well grounded advice across a broad spectrum of structuring and governance matters.

Michael Richardson Partner, Global Head of Funds & Investment Management

CIMA Registered Open-Ended Funds

As at 31 December 2025, there were 12,876 funds registered with the Cayman Islands Monetary Authority (CIMA) under the Mutual Funds Act of the Cayman Islands (MFA), continuing the general upward trajectory in the number of funds registered with CIMA since 2017.

The Maples Group acts for approximately one third of the funds registered under the MFA. In this report, we share our observations and analysis of the terms of CIMA-registered open-ended funds launched by the Maples Group during 2025. The data presented in this report excludes any funds classified as master funds under the MFA, which generally do not have their own offering document.

The Maples Group acts for approximately 1/3 of the open-ended funds registered in the Cayman Islands.

Investment Strategies

Almost one third of open-ended funds launched in 2025 utilised equity strategies, with fixed income and credit strategies being the next popular category amongst funds launched in 2025.

Consistent with previous years, macro strategies, multi-strategy and fund of funds also comprised a significant portion of the funds launched in 2025.

Of the 31% of funds employing equity strategies, more than half were equity long short, with the remainder (in order of popularity) being equity long only, growth equity and equity hedged.

Investment in Digital Assets

There has been a continued rise in the portion of funds expressly permitting investment in digital assets with 17% of open-ended funds launched in 2025 expressly permitting investment in digital assets, up from 14% in 2024.

Equity strategies remain dominant, followed by macro and fixed income and credit strategies.

Investment Managers

North American investment managers accounted for more than half of all funds launched in 2025.

Regulation of Managers

Consistent with the trend observed over the last few years, the vast majority of funds launched in 2025 had a regulated investment manager.

% of Funds Launched with Regulated Managers

Atleastonefemalekeyperson

Key Persons

Only 17% of the funds launched in 2025 had at least one female key person named in the offering document, and only 3% had a majority of female key persons.

Female participation at senior levels in the industry remains low.

Fund Structures

The “classic” master-feeder structure—typically comprising a Cayman corporate master fund, one Cayman corporate feeder and one Delaware partnership feeder—has seen its previously dominant position erode in recent years. This has been driven primarily by cost considerations with managers electing to structure their funds as single-legged masterfeeder structures or stand-alone funds where two feeders are not immediately required at launch. That said, 2025 did see a slight increase in the use of “classic” master-feeder structures with 25% of newly launched funds adopting this traditional configuration compared to 18% in 2024.

Master-feeder structures continue to serve an important purpose where managers seek to raise capital from diverse investor bases while maintaining appropriate segregation between investor types. US taxable investors, for instance, frequently invest through a separate feeder vehicle from their non-US counterparts. Though master-feeder structures still account for the majority of funds launched in 2025, single-legged master-feeder structures (where only one feeder is established at launch) remained just as popular as “classic” master-feeder structures. This trend likely reflects managers’ focus on cost efficiency, as noted above.

Double-legged master-feeder structures utilising two Cayman feeders fell in popularity in 2025, representing just 5% of funds launched. The use of Cayman corporates for both feeder vehicles has been standard practice across Asia for more than a decade, with managers finding that their US taxable investors are equally comfortable with this approach as they are with Delaware structures. In Europe, where dual Cayman feeders are employed, one is commonly structured as a Cayman corporate (for non-US and US tax-exempt investors) whilst the other takes the form of a Cayman partnership (for US taxable investors), thereby replicating the legal characteristics of entities in a classic master-feeder arrangement.

Stand-alone funds have maintained their appeal, comprising 25% of funds launched in 2025, despite this figure having decreased from 31% in 2024.

Vehicle Types – Overall

Consistent with previous years, corporate vehicles were the most popular vehicle type for funds launched in 2025 followed by ELPs. The use of trusts in 2025 was generally limited to stand-alone and umbrella funds, as indicated by the vehicle types used for feeder funds and master funds on the next page.

Vehicle Type – Feeder Funds

Corporate feeder funds have experienced a sustained decline in popularity over recent years; nevertheless, the exempted company continues to be the most common structure for feeder vehicles, with the exempted limited partnership ranking second. This enduring preference for the Cayman exempted company reflects its reputation as a straightforward and well-established structure that is familiar to investors globally.

Domicile of General Partners

Cayman exempted limited partnerships are required to have a qualifying general partner— namely, a company or partnership domiciled in the Cayman Islands, or alternatively a foreign company or foreign partnership that is registered in the jurisdiction. For funds structured as partnerships in 2025, Delaware entities overtook Cayman exempted companies as the most frequently utilised general partner vehicle, reflecting the fact that US-based managers continued to favour Delaware entities for this role. Of the other general partner vehicles used, the majority were structured as non-Delaware US entities.

Vehicle Type – Master Funds

of new open-ended feeder funds were structured as corporates (including SPCs)

Almost three quarters of the funds launched in 2025 had a master fund or other vehicle through which they invested, with the Cayman exempted company being the most popular vehicle for master funds, followed by the Cayman exempted limited partnership, in line with the trend observed in prior years. That said, 2025 saw a marked increase in the use of Delaware entities for this purpose, with such entities comprising 21% of newly launched master funds.

Independent Governance

In line with industry practice and expectations, most new open-ended funds have some level of independent oversight.

What proportion of directors are independent?

In the context of corporate funds, 83% of those launched in 2025 included at least some independent directors on their boards, whilst 76% had boards comprising entirely or predominantly independent directors. A common governance arrangement for corporate funds is to appoint one individual from the investment manager alongside two independent directors, typically sourced from the same service provider.

For partnership funds launched in 2025, 42% incorporated some form of independent oversight. In most of these cases, independent governance was established at the fund level through the appointment of a committee of independent persons responsible for approving or consenting to matters of a similar sort to those typically reserved for the board of directors in a corporate fund context. In other instances, independent oversight was achieved by the appointment of independent directors to the board of the general partner (or ultimate general partner), particularly where the general partner was domiciled in the Cayman Islands.

Are the AML officers independent?

Having independent oversight is also consistent with the outsourcing of AML officers being the norm, with more than three-quarters of funds launched in 2025 appointing independent external AML officers.

Fund Terms

Umbrella Funds

Roughly 5% of funds launched in 2025 were established as umbrella funds, enabling the creation of multiple sub-funds within a single vehicle. The umbrella structure offers a number of advantages, including cost efficiencies, enhanced operational flexibility, and the capacity to launch new sub-funds with relative speed and ease. These characteristics make umbrella funds a compelling choice for certain managers and their investors.

The vast majority of umbrella funds launched in 2025 utilised the Cayman segregated portfolio company (SPC) structure, accounting for 78% of cases. This predominance is unsurprising, as the SPC framework provides statutory ring-fencing of assets and liabilities between segregated portfolios—a feature particularly well-suited to umbrella arrangements. Unit trusts comprised 11% of umbrella fund structures, as did exempted companies.

Exempted Company

ERISA Investors

60% of funds launched in 2025 permitted participation by ERISA investors, reflecting managers’ ongoing efforts to expand their potential investor base. In the majority of cases, ERISA investor participation was capped at the customary 25% threshold to ensure that the fund’s assets would not be characterised as “plan assets” subject to ERISA.

% of Funds Permitting ERISA Investors

Subscription Funding

Capital commitment drawdown structures for funding subscriptions were historically uncommon among open-ended funds. In recent years, however, a notable proportion of funds have embraced this approach, with approximately 15% of launches in each of the past three years featuring capital commitment drawdown arrangements. Among funds launched in 2025 utilising this structure, private credit and fund of funds were the most prevalent investment strategies.

Are subscriptions fully funded?

Caps on expenses

Caps on expenses (organisational or annual) remain relatively uncommon in line with the trend observed in prior years.

No cap on organisational expenses disclosed in the PPM

No cap on annual expenses disclosed in the PPM

Cap on organisational expenses disclosed in the PPM

Cap on annual expenses disclosed in the PPM

Capital Structure – Corporate Funds

Corporate funds commonly issue non-voting participating shares to investors whilst issuing voting non-participating shares (frequently termed “Management Shares” or “Founder Shares”) to another party for administrative convenience. 91% of corporate funds launched in 2025 included voting non-participating shares in their share capital.

In the majority of cases, voting non-participating shares carry full voting rights, save in respect of material variations to economic terms, which typically require approval from investors holding participating shares. However, for regulatory reasons, certain funds established by UK-based managers issue voting non-participating shares with limited voting rights, conferring only specified powers sufficient to avoid the need for investor consent on routine matters such as name changes, amendments to authorised share capital, or the creation of new share classes. Of the corporate funds launched in 2025 with voting nonparticipating shares in their capital structure, 25% featured shares carrying limited rather than full voting rights.

For funds launched in 2025 with voting non-participating shares in their authorised share capital, these shares were held by the investment manager or an affiliate in over 65% of cases. Where such shares are held by a party other than the investment manager, regulatory and tax considerations are typically the primary drivers.

trustee/star trust arrangement

Currency Classes of Participating Interests Offered to Investors

Only 18% of funds launched in 2025 offered classes, sub-classes and/or series of participating shares or interests in more than one currency, comparable to 14% in 2024.

Does the fund charge both management and incentive fees?

In line with the trend observed in prior years, most new open-ended funds still charge both management fees and incentive fees although the classic 2 and 20 fee arrangement is no longer dominant as outlined below.

Management Fee Rate

Of the funds launched in 2025 that charge a management fee, the overwhelming majority charge annual management fees at a rate lower than 2%.

Incentive Fee Rate

The “classic” 20% incentive fee rate has remained dominant in 2025 (more than one-third of new fund launches) in line with the trends observed in recent years.

High watermarks and loss carry forward continue to be standard and consistent features of incentive fee structures, being present in approximately 88% of the funds launched in 2025 that charge an incentive fee.

Accounting for Incentive Fees

Of the funds launched in 2025 that charge incentive fees, series accounting remains the predominant mechanism for ensuring investors are subject to incentive fees solely on the performance attributable to their own shares or interests. Equalisation accounting, which historically enjoyed greater popularity in the UK and Europe, has continued its decline, with only 4% of funds launched in 2025 employing this approach compared to 5% in 2024.

In nearly two-thirds of funds charging an incentive fee, such fees were structured as an allocation of profits rather than as a fee payable under the investment management agreement.

Pass Through Expenses

Pass-through expenses have grown increasingly prevalent, featuring in 12% of funds launched in 2025 up from 9% in 2024. Of those funds incorporating pass-through expense provisions, more than half pursue either fund of funds or multi-strategy investment approaches.

12% of funds had pass through-expenses

88% No pass through-expenses

Allocation to a class or series of interests in the fund Fee

Liquidity

Over 80% of funds launched in 2025 offered monthly or quarterly redemption cycles, in line with patterns observed in preceding years. The overwhelming majority of funds provided redemption notice periods of three months or less, continuing the established trend in recent years.

Frequency of Redemptions/Withdrawals

78% of funds have a redemption notice period within the range of 1 to 3 months

Notice periods for redemptions/withdrawals

Lock-up Periods

49% of open-ended funds launched in 2025 did not impose any lock-up period compared with 51% in 2024. Of those that did, 50% featured a hard lock-up, 31% a soft lock-up, and 19% incorporated both mechanisms.

For funds with lock-up provisions, a one-year lock-up period was most prevalent, applicable to both hard and soft lock-up arrangements. Where a soft lock-up was imposed, over 90% of such funds applied a redemption fee of 2% or higher.

49% No Lock-up Period

Gates

51

55% of the funds launched in 2025 had a redemption gate compared with 51% in 2024, highlighting the continued prevalence of redemption gates as a liquidity tool.

Among funds incorporating redemption gates, over 80% employed a single gate type, with the balance utilising a combination of fund-level, class-level and/or investor-level gates. Fund-level gates proved most prevalent, featuring in 63% of funds with gate provisions. Irrespective of gate type, a 25% threshold for triggering the gate was adopted by more than half of funds with redemption gates.

The Power to Side Pocket

More than a third of open-ended funds launched in 2025 incorporated side pocket powers, continuing a trend in recent years towards including such provisions in fund documentation for new open-ended vehicles. This is especially pronounced in Asia, as nearly three-quarters of funds launched by Asian managers in 2025 featured side pocket powers. Side pocket powers provide managers with the flexibility to segregate particular investments, manage exposure during periods of market volatility and, in certain instances, access opportunities in private markets.

Of the funds with side pocket powers, participation was mandatory in 81% of cases and at the investor’s election in 7%, with the remainder offering a combination of both approaches. Only 24% of funds with side pocket provisions imposed a cap on the amount that could be allocated to side pockets.

2026 Outlook

The Cayman Islands open-ended funds industry entered 2026 with real momentum after global hedge fund industry capital surpassed the US$5 trillion mark at the end of 2025, recording the strongest year of investor inflows since 2007.1 Looking ahead to the remainder of 2026, the Cayman Islands is set to maintain its position as a premier destination for open-ended fund formation and administration. The jurisdiction’s tax neutrality, advanced legal framework, and dynamic financial sector position it to benefit from continued increases in hedge fund allocations, which are expected to accelerate sector growth in 2026.

Market conditions and flows

Higher single stock volatility, wider valuation dispersion and divergent policy paths create a constructive backdrop for alpha generation into 2026. This backdrop favours equity long/short, market neutral and event driven strategies, although the AI led rally has prompted increasing warnings of a bubble.

Geographically, surveys point to renewed interest in China and broader pan Asia, while North America cools from recent highs.2 The rotation towards Asia reflects improving sentiment following signs of a China rebound and sustained enthusiasm for macro, quant equity and multi strategy. Cayman master feeder and stand alone structures remain well suited to these reallocations.

Strategic and structural evolution: SMAs and tokenised funds

Separately managed accounts (SMAs) have become a fast growing channel for hedge fund exposure, and are likely to keep expanding as allocators pursue capital efficiency and customisation. For investors, SMAs offer enhanced information rights and position level transparency, alongside greater flexibility on fees and terms than a commingled fund typically allows, while for managers SMAs may open a capital raising route with quicker onboarding and lighter upfront infrastructure. The flexibility of Cayman Islands legal structures lends itself to SMAs structured as single investor vehicles, allowing the jurisdiction to capitalise on this trend.

In addition, demand for tokenised funds continues to grow as managers and investors seek to harness blockchain technology for greater efficiency, transparency and access. Over the past year the Maples Group has advised on the establishment of a number of tokenised funds regulated under the Mutual Funds Act where investors’ interests are represented by digital tokens recorded on distributed ledger technology, with issuance, transfer and registry functions effected via smart contracts. This trend is expected to continue and enhancements to the Cayman Islands Mutual Funds Act are anticipated in the near term to specifically contemplate tokenised funds.

Regulatory responsiveness: CRS 2.0 and operational readiness

The Cayman Islands remains at the forefront of global initiatives and in this vein recently introduced legislation to implement the OECD’s updated Common Reporting Standard: CRS 2.0. The Cayman Islands’ CRS 2.0 Regime which took effect on 1 January 2026 (with certain operational changes applying only from 2027), introduces measures that tighten data quality expectations, bring certain deadlines forward, require the appointment of a principal point of contact based in the Cayman Islands and expand the scope of reportable data, particularly to address digital assets.

Outlook for Cayman Islands open-ended funds

Against this backdrop, Cayman Islands open ended funds are well placed to capture incremental allocations through the remainder of 2026 and 2026 launches are expected to concentrate on strategies that monetise dispersion while managing beta. With distribution channels broadening via SMAs and tokenised funds, and with the regulatory perimeter evolving through CRS 2.0, successful managers will combine product innovation with meticulous compliance readiness and investor friendly terms. Taken together, these features should reinforce the Cayman Islands’ position as the preferred jurisdiction for the establishment of open-ended funds, even as markets remain volatile and due diligence standards rise.

The Maples team is composed of extremely bright, commerciallyminded and solutionseeking lawyers. Their expertise brings tremendous value to any matter.

CHAMBERS GLOBAL