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As a hedge fund guy, you stick your money on an island for tax reasons, but it's not always the nefarious reason everyone thinks.

It's the tax neutrality that matters. Once an investor takes money back to their own country, they are responsible for the taxes themselves. Rather than a system where for instance you might pay the country of residence and every investor from around the world needs to fill in forms to get their difference back.

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Yes - I'm also in the asset management industry. The ultimate point is, investors in a fund don't want to end up in a worse tax position than if they'd made the investments in the fund directly and not via a fund. The worst of all worlds are paying tax at the fund level and not being able to offset that against local tax due - this is surprisingly more common than you might think; not to mention tax-exempt investors like some pension funds (sovereign wealth funds are a bit different again).

Some jurisdictions for fund tax residence/incorporation are much much better for this than others. If you then also look at jurisdictions which have a predictable and fair legal system and an efficient admin setup for funds you end up with quite a short list of places (Cayman, Luxembourg, Ireland, etc).

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