British Crown Dependency, The Isle of Man, is looking to attract middle office operations of hedge funds, recognising that front office activity will likely remain in high profile financial centres such as New York and London's Mayfair or move to places like Geneva according to Alan Smith, chairman of the island's fund managers' association. The island, which has recently gone through a major funds review, also accepts that Asian centres, in particular India, will increasingly compete successfully for the back office work required by fund administrators. "We're hoping to attract more hedge funds to the island through our zero rate of corporate taxation, which although not applicable to banks does apply to hedge fund management, investment activity and all forms of administration," Mr Smith told WealthBriefing. "There's also a £100,000 cap on personal income tax here, and for highly-paid hedge fund managers this must be a consideration," he said. "Perhaps Geneva is our biggest competitor in attracting hedge fund managers but for middle office operations here there's an unrestricted housing market and a work permit can be granted within three days," he said. "And Cayman is vulnerable as a centre for the domiciliation and administration of hedge funds because if there's another major hurricane there the infrastructure will suffer. Its one reason why Cayman law firms have merged with law firms in other jurisdictions." The island's focus is shifting towards hedge fund management rather than administration also because of the hugely higher margins that this work attracts - often between 50 and 100 basis points, rather than the more usual 10 basis points that back office administration commands. But for hedge fund managers to consider re-location, quality of life is an important factor and whilst this is enviable in most respects it must include a good choice of high quality restaurants and hotels, which is something that the island currently lacks, but is working hard on to improve, says Mr Smith.