"A Cayman vehicle is clearly not a plain-vanilla activity," Jeremy says, his eyes lighting up in a way that appears to have nothing to do with his consumption of vodka on the Sunset House deck. He is happy to explain: "A guy in India goes into a joint venture with a guy in Russia to buy a power plant in China. So when they fall out with each other, I’m the guy in the middle with a Russian client, traveling back and forth between Moscow and Bombay."
The question of whether the Cayman Islands can continue to generate the million-dollar paychecks that keep talented professionals moving to a sandbar in the middle of the ocean—with some of the best diving in the world nearby—rests on the able shoulders of perhaps three dozen men, including Jimmy Bergstrom, a lawyer. "If you don’t set up your hedge fund in Cayman, the investors will get nervous," Bergstrom says in a posh English public-school accent, sitting at his desk near the window of his office in George Town. His father arrived on the island from Wisconsin in 1960, built a 14-room honeymoon resort, and sent his son, Jimmy, away to school in the U.K.
The island’s latest wave of prosperity is the product of the 1993 Mutual Funds Law, "the first proper investment-funds law in any of the offshore jurisdictions," Bergstrom says proudly. With a few simple but powerful precedents to draw on, teams of professional experts meet and draw up new laws, which are reviewed by government experts and approved by the legislature.
"There is the English Companies Act, the Partnership Act, and the Limited Partnership Act," Bergstrom says. "And that’s basically it." As a result of its tailor-made legal structure, the Cayman Islands have become the domicile of record for more than seven thousand of the world’s eight thousand–plus hedge funds. "Last year we did more than 400 hedge funds at this firm alone," Bergstrom says with an easy smile.
Richard Smith, the head of civil aviation on Grand Cayman, grew up in North Side, where the roads were unpaved. "It would take an hour and a half to get to school. It wasn’t until 1970 or 1971 that we got electricity," he remembers. Most of his friends left school to go to sea, as generations of Caymanians had done before them, and were gone for years at a stretch. The pristine white-sand beaches that first attracted pioneering bankers and lawyers like Bill Walker, who came to Cayman in the late 1960’s, were of little interest to island residents.
"Nobody wanted to live on the beach," Smith says with a smile. "You had sand flies. The salt air would kill you. It was the happiest day of my life when we moved inland. We were just tired of the salt. It consumed everything."
A soft-spoken, well-dressed man in his late forties, Smith works in a spare, windowless office decorated with slick color posters of expensive private jets, more of which are registered on this small island than on nearly any other offshore location. (Cayman is also a leader for the flagging of large yachts, none of which can dock in the shallow harbor.) He handles 40 to 45 flights a day, half of them civil and half commercial, bringing in approximately 480,000 arrivals per annum. Another million people arrive on cruise ships, disembarking for a fee of $10 per head. When he first joined the island’s air-traffic control, in 1976, his headquarters was a zinc-walled shack, where he supervised a total of three flights a day, from Miami and Costa Rica.
At the laid-back Owen Roberts International Airport, Marcus Cumber runs charters and services private planes that arrive on the island. He’s the 36-year-old heir to one of Cayman’s oldest names (his grandfather was governor-general of the island, which remains a possession of the British crown and a dependent territory), if not necessarily to one of its biggest fortunes.
Servicing the planes gives Cumber a good idea of how the island is changing, who visits here, and why. "I’m seeing more and more G-5’s and the new Citation 10, which is the fastest civilian plane in the world," Cumber says, gesturing out at the sunbaked tarmac, where a shiny new Gulfstream is being worked on by one of his crews. The most popular destinations for charters, he says, are Havana and Jamaica, where restless locals can find things that they can’t find on Cayman. "The biggest complaint is golf," he says. The island’s 18-hole course has been closed since Hurricane Ivan; it’s scheduled to reopen this winter.
Whereas Cayman once attracted only lawyers and accountants, he says, today the island also draws some of their vacationing clients, who might have landed here for an obligatory board meeting and found that they liked the place. When Cumber declines to drop any of the names of his clients, I ask him about the Microsoft billionaire I noticed on a chart back in his office.
"Paul Allen, he’s one of our better customers," Cumber says with a grin. "Flies over on the helicopter from his yacht, which is currently parked off-shore, and has dinner on the island." Allen is scheduled to arrive in an hour. Another occasional client is the DEA, coming in on the trail of drug runners, who have been known to use Cayman as a transshipment point between South America and Miami.
On my way back from the airport, on Seven Mile Road, I find more evidence of Cayman’s cosmopolitan spirit: a rush-hour traffic jam that would not be out of place in New York or London. I am late to meet two women who work at a big-name investment bank. Both are blonde and wear lipstick and could easily star in a Caymanian version of Sex and the City. Jill is a native. Her friend Mel is an accountant who, like half the accountants on the island, came here from Canada.