Caymans seek hedge fund families in growth push

By Laurence Fletcher and Chris Vellacott

LONDON (Reuters) - The Cayman Islands hope more hedge fund managers and their families will move to the off-shore centre as it seeks to boost tax revenues, the Caribbean territory's prime minister told Reuters.

The British overseas territory -- legal home to most of the world's hedge funds, but with less than 50 managers actually based there -- wants to attract more financial firms as it struggles with a budget deficit.

"It's what I encourage, it's a new drive. You bring your children," premier McKeeva Bush said in an interview on Monday.

Politicians have demanded tighter regulation of financial havens across the globe, and the Cayman islands in August joined the global "white list" of countries using internationally recognised tax standards, as defined by the OECD.

Nearly 10,000 funds are based in the Cayman Islands, a group of three islands to the south of Cuba, attracted by its light-touch regulatory framework, and financial services account for up to 70 percent of its economy.

But with the crisis, the territory has seen its public finances fall into the red and it is now looking for means to make economic growth more sustainable.

The islands will make it easier to secure work permits for family members and domestic staff of financial professionals seeking to relocate, he said.

"People are running from the UK and metropolitan areas because of the tax regime," he said. He said he hopes for $2.7 billion (1.6 billion pounds) of investment over the next three years.