he second MAR hedge fund conference of a busy week was a one-day affair on Wednesday, entitled "The 8th International Conference on Offshore Funds". Attendance was light, compared to the earlier conference, but 100 or more hardy souls spent Wednesday contemplating the intricately complicated business of operating offshore hedge funds.

After a keynote address by Steven Fredman, partner in Schukte Roth & Zabel, a New York law firm, the morning sessions began with a comparison of the US, UK and Luxembourg from a hedge fund perspective. These are not the first jurisdictions that come to mind when one considers the offshore community; the first two, indeed, have been leading the charge to cripple the offshore world.

Ah, but just as one man's ceiling is another man's floor, so the US can be considered offshore from, say, Mexico (at a stretch) and the UK, more charitably, sees itself as offshore from Continental Europe. The great genius of Luxembourg, which is one of the most landlocked countries in the world, has been to cast itself as simultaneously offshore and a proud member of Europe, shifting skins whenever that suited its purposes. Then, too, Luxembourg's financial independence is about to be crushed by the and to its north and east, for having the audacity to wish to retain banking secrecy, so the Luxembourgeois may be considered honorary offshorers, perhaps.

After a session on "the basis for establishing an offshore fund" and a buffet luncheon, the potentially most interesting session of the day was held. "Jurisdictions" was its title and five such territories its meat. Representatives from the Bahamas, Bermuda, the Cayman Islands, Dublin and the Isle of Man outlined the advantages each offers and, in one or two cases, the disadvantages.

The Isle of Man batted first. Jayne Evett is manager of fund services for Caledonian Trust (IOM) Ltd. Hedge funds are to the Isle of Man much as Naomi Campbell might be to an octogenarian male: highly desirable and all that, but not likely to lead to any action soon. Although Ms Evett bravely ran through the Isle of Man's many advantages as a jurisdiction, she candidly admitted that it is the "runt of the litter" and that it had "got off to a bad start".

ut now, she said, "the Isle of Man has landed," which will be good news for those who live there. What's more, the Isle is cheap for hedge funds. She then listed all the things that make the Isle of Man so uniquely attractive: fine telecommunications, an intelligent workforce, good air connections and so forth. She rather spoiled the effect by closing with "wind and rain".

Next up, for the Bahamas, was Pamela Klonaris, an attorney and partner in Klonaris & Co. "The Bahamas is open," she stated, "and will remain open." Good news, then for Bahamians, too. After an exhaustive review of legislative changes in the past 12 months, the newest member of the "clean jurisdictions" brigade reported that the Bahamas had gotten themselves off the OECD list in March this year.

Ms Klonaris then listed the unique advantages of the Bahamas: fine telecommunications, an intelligent workforce, good air connections and so forth.

Interestingly, she referred to "the issue of Bahmianisation" and its relation to the policy of "Bahamians first". How depressing to think that the 19th century territorialism that so charged up the Fascist Jean Marie LePen in the recent French elections, and which has Bermudians in its thrall, is dulling the senses in the Bahamas, too. Even those opposed to globalisation, it seems, have unified their objections into a boring mantra of "me first".

Jonathan Tonge, a partner in the Cayman law firm Walker's, spoke next. He listed the many advantages of the Cayman Islands: fine telecommunications, an intelligent workforce, good air connections and so forth. He spoke of "effective but non-intrusive regulation", the quality of service providers, the islands' good reputation and their cost effectiveness. Bravely, he listed the negatives: the inability of Cayman hedge funds to sell on a retail basis in Europe, because of the islands' not belonging to the EU. Yet the owner of the Cayman Islands, Britain, is a member, and so Cayman is subject to all the rules and regulations of which the British are so enamoured. Cayman, then, suffers from the "worst of both worlds" scenario that dogs us here in Bermuda.

In a pointed dig at the Somers Isles, Mr. Tonge added: "We have no tax treaties," and to underline his point, added: "If it's tax treaties you want, we don't have any." Message received.

James Keyes, a partner in local law firm Appleby Spurling & Kempe, followed. He sensibly chose not to dwell on Bermuda's unique advantages (fine telecommunications, an intelligent workforce, good air connections and so forth) until near the end of his short presentation, but instead took great glee, in a dignified way, in pointing out that Cayman was more expensive than Bermuda when it comes to hedge funds.

Bermuda is the 800-pound gorilla, or perhaps the 22 square-mile gorilla, of the offshore world. "Other parts of the world have been catching up with us," Mr. Keyes said. At the foot of his final slide, he obliquely referred to "external pressures" that might affect the way Bermudians earn their living, without naming them. They are: Americans, the British, foreigners on work permits, the Cayman Islands and so forth.

Panel moderator Dermot Butler, chairman of Custom House in Ireland, spoke about Dublin to conclude the presentations section of the session. "Unlike the others, our regulation is effective and intrusive," he said. "We are more expensive than the others. We are not attractive from a prime broker perspective. And yet," he said, "Dublin has done very well." Mercifully, he spared us altogether the list of what makes Dublin uniquely attractive, which would be much the same as everywhere else, but would include Guinness.

A brief panel discussion then centred on immigration and work permits. Bahamas apparently has 50,000 illegal immigrants. Cayman, half of whose population is on a work permit, has room for many more foreigners, we were told. Ireland cannot attract foreigners, apparently, given the recent downturn in economic affairs.

Mr. Keyes then pointed out that Bermuda "has trouble getting people to leave".

He briefly mentioned Government's plan to kick all foreign workers out of Bermuda in 2007 and subsequently limit new overseas workers to short-term permits. Mr. Tonge had the decency not to burst into wild applause.

How a hedge fund manager chooses a jurisdiction was not apparent from this session. Yet choose they do. Cayman has 3,500 such funds. Bermuda has quite a few. Dublin has 55. The Isle of Man has wind and rain.

Like the operations of the funds themselves, the grounds for selecting a domicile remained as obscure to the general observer as the instructions for setting up a videocassette recorder.