drewcoul4 hours ago
respectful_observer: So, does the WT have $40 million in this fund and the fund has a value of $500 million including investments from others? Or does the WT have $500 million in this fund and $40 million is in the Caymans?
The fund's total assigned value is $500 million, of which the WT has taken a $40 million stake. Investing in a Cayman-registered fund is different than having money in a Cayman bank. If your money is in a Cayman bank, your money is actually in the Caymans. Just because a fund is created in the Caymans does not mean the money itself sits there. There is no requirement for a Cayman fund to use a Cayman domiciled custodian. In other words, K2 can create the fund in the Caymans, then use a U.S.-based custodian bank to hold the funds. Big ones include State Street, Fidelity, etc.
The reason why the Caymans are popular domicile of funds is that it's tax neutral. In other words an investor from anywhere in the world can invest in the fund and not have to worry about the Cayman government taking a tax cut out of the earnings. This way the fund manager can market to anyone in the world knowing that investors in the fund will only need to worry about their own government's taxes.
Hope this helps.
