Saying Bermuda has "lost the race" for hedge funds business, Bermuda-based technology company Ignition is establishing an office in the Cayman Islands to service the burgeoning sector.

Ignition aims to provide businesses in Cayman with technology-based solutions when they are faded with staff shortages.

"Bermuda has lost the race for the funds business," Ignition president and CEO Graham Pearson said. "We view Cayman as a staging platform for growth in the Caribbean. Barbados, Tortola and Turks and Caicos are all experiencing good growth.

"With our new Cayman presence we are well positioned to expand into those markets. Expansion is to meet the demands of existing Bermuda clients that have representative offices in Cayman.

"We also wish to take advantage of significant growth that Cayman is experiencing in the funds sector.

"Based on our experience in other similar markets, it's clear to us that as business grows, there is an increasing demand for more senior and experienced IT skills to help local companies deliver maximum value while keeping costs down."

Eighty percent of the world's hedge funds are registered in the Cayman Islands. Some 665 hedge funds established a presence in the Cayman Islands in the first five months of 2006.

As of the end of 2005, there were 7,106 hedge funds registered in the Cayman Islands, outstripping other offshore jurisdictions including the British Virgin Islands at 2,372 funds and Bermuda at 1,182, according to the Cayman Islands Monetary Authority (CIMA).

Ignition has offices in Bermuda, Halifax and Atlanta but in introducing its services to the Caymans, the company has been mindful not to burden the Island's infrastructure.

"As in Bermuda, Cayman are experiencing challenges regarding immigration and finding/retaining ex-pat workforce, and Cayman are executing on, the seven year no work permit renewal policy."

"This is putting pressure on organisations to service needs of their business and are looking to technology more than ever to reduce dependency on staffing."

Mr. Pearson said some expatriates in Bermuda with contracts expiring in Bermuda may be hired to work in the Caymans to respond to the needs of clients in Bermuda who require on-site service.

"The new service will be of particular benefit to the Cayman's because it brings IT expertise to the Island with no impact on residents' job opportunities," Mr. Pearson said.

"By working with Ignition staff, existing IT staff have opportunities to broaden and expand their own IT skills by working closely with subject matter specialists, as well as being given more time to focus on strategic projects rather than day to day help desk issues.

"The ability to bring in senior level engineers for specific projects from Bermuda or Atlanta goes a long way to address the challenges for finding and retaining expatriates."