dms Management Ltd (dms) recently partnered with US-based Optcapital, LLC, deferred compensation specialists, to host a seminar on ‘Understanding Offshore Fee Deferrals’.
A dmsmedia release stated that the seminar was a private invitation-only event for local hedge fund service providers held on 21 January at The Ritz-Carlton Grand Cayman.
David Bree, Manging Director of dms, welcomed attendees and introduced the speakers. Optcapital’s Managing Principals, Jim Christian and Thom Young, addressed some of the significant changes in US legislation, specifically the IRS’ 409A, which directly impacts the manner in which hedge fund managers are paid for work provided to hedge funds. Young and Christian presented back-to-back sessions during the morning, addressing the 100-plus attendees, providing an overview of US deferred compensation plans, details of 409A, and the implications for Cayman service providers.
According to the presenters, 409A requires strict compliance with highly technical documentation, proof and timing rules and imposes absolute liability for failures. The IRS’ interpretation of this statute is 400 pages and generally prohibits payment acceleration.
Young and Christian also offered insight into the current economic forecast for hedge funds, the risks associated with noncompliance of 409A, and ultimately drew inferences on how these developments will impact the future of Cayman Islands hedge funds.
Mr Bree said: “dms Management recognizes the importance of presenting this topic to the Cayman Islands hedge fund community. With the start of the new year, we wanted to showcase Optcapital’s meaningful insights to enable local service providers to be better equipped to handle these changes and any challenges they may face.”