Mike Byrne arrived in the Cayman Islands 48 hours ago from Manhattan. Now, dazed but happy in a ratty white T-shirt and a pair of brown cargo pants, he nurses a beer and looks out over the blue Caribbean Sea, while pinkish blond children play on the wooden deck of the Sunset House bar under the watchful eyes of mommies in sundresses and halter tops and daddies in shirtsleeves, their suit jackets slung casually over neighboring chairs.
"I spent a week here in November. I didn’t expect this island to be as modern as it is," Byrne says, still trying to make sense of the contradictions of the strange new world he will inhabit for the next two years: a high-pressure financial capital like Zurich or London, but conveniently located on a small island in the middle of the Caribbean. A junior trader for a hedge fund called RBC, Byrne is renting an apartment on Seven Mile Beach for $4,200 a month. "I got my cable modem hooked up within fifteen minutes," he says.
The Cayman Islands (not "the Caymans," a misnomer that locals blame on John Grisham, the novelist who is also blamed for giving the place its reputation for money-laundering) are a golden sandbox for everyone from financial-industry professionals to scuba divers. In addition to being the jurisdiction of record for approximately 80 percent of the world’s hedge funds—1,752 new ones were registered here in 2005 alone—Grand Cayman, or Cayman, is also a leading center for banks and trusts and the captive-insurance market, and for global deal makers who use the island as a tax-free haven for arcane transactions. The smaller islands of Little Cayman and Cayman Brac are of interest chiefly to divers.
An offshore financial center dreamed up by a small band of visionary lawyers and accountants who arrived on Cayman’s beaches almost 40 years ago, the island today has 42,000 legal residents—half of whom are not Caymanian. There is no crime to speak of on the island, and a negative unemployment rate, which means that even hedge-fund managers leave their doors unlocked and every native-born Caymanian is guaranteed a job. The fact that more than half the island’s residents are short-term employees, accountants and other financial professionals who sign on for two-year stints on the beach, only adds to the island’s otherworldly, utilitarian shimmer. Modest houses on Sticky Toffee Lane and Uncle Bob Road sell for upward of a million dollars.
The paradoxical reality of life in the world’s fifth- largest financial center is still something of a secret—at least to the majority of the one million passengers who disembark every year from the giant cruise ships in George Town Harbour, and whose vision of the island is limited to a few square blocks of faded colonial buildings, duty-free jewelry stores, and T-shirt shops.
Yet the very same qualities that have transformed an obscure island into the Switzerland of the Caribbean—ultramodern infrastructure, zero crime, great sailing and diving, and tens of thousands of well-heeled young businessmen and -women—also make Grand Cayman an alluring site for luxury hotel development. Four Seasons and Mandarin Oriental are in various stages of acquiring properties on the island; Ritz-Carlton has already opened a 365-room beachfront hotel, with views of the cruise ships in the harbor, along with year-round-condo purchase plans, Jean-Michel Cousteau–branded nature tours, Nick Bollettieri tennis pros, a La Prairie spa, and chef Eric Ripert’s new fish restaurant, Blue.
Over drinks, Jean Cohen, general manager of the Ritz-Carlton, Grand Cayman, waxes optimistic about her hotel’s offerings. "Go out to Rum Point, to the Botanical Gardens or Stingray City. We have marine biologists on-site. We can take you kayaking through the mangroves," she says. Cayman’s high-end tourist business is growing fast: within six weeks of opening, occupancy rates at the Ritz-Carlton were above 80 percent.
When I ask Cohen why the big luxury-hotel chains seem to have agreed on Cayman as the next destination in the Caribbean, she answers in a single word.
"Convenience," she says, adding, "It’s a very safe country. It’s clean; you’re not bothered by poverty; the water is beautiful; it’s an hour from Miami."
Sitting at the bar at the Sunset House, Jeremy, a rail-thin, tanned, handsome banker in a pink oxford shirt, happily shares observations about life on the island. Young lawyers usually come out from England, Australia, New Zealand, or South Africa for a seven-year stay, he explains. Accountants come here for a year or two from England and Canada to escape cold winters and audit the hedge-fund books. There are four direct flights a week to and from London on British Airways. On weekends and holidays, young industry players race their yachts, experiment with evermore elaborate varieties of waterskiing and parasailing, and compete to see who can charter a plane to the wildest offshore destination and make it back by the time the markets reopen on Monday morning.
After reminiscing about weekends in Havana and flights on dilapidated old Russian cargo carriers, Jeremy comes back around to the true pulse-pounding excitement of living in Cayman, which for him has less to do with complex water sports or exotic getaways than it has with exotic financial instruments and complex financial transactions.