Gold has been the investment story of the past three years. Hunter Wise International Commodities, a wholesale commodities trading firm that launched in 2008 and benefitted from the boom, has now established offices in Cayman. Although as an exempt company Hunter Wise is not able to conduct business on island, Vice President Kyle Martin anticipates fast growth and is looking to hire Caymanians for the company’s trading business.
Hunter Wise does not buy to or sell from retail customers but works with independent dealers and institutional investors. It is as such strictly a wholesaler in physical gold and other commodities to businesses which in turn trade with the retail public.
In addition to the physical products, Hunter Wise, an affiliate of specialised investment banking firm Hunter Wise Financial Group, LLC, offers credit facilities to purchase commodities, arranges for the delivery and storage of the commodities and provides outsourcing services for all trade-related and back office accounting tasks. “We provide leverage 4 to 1, so that [a dealer can] put down $25,000 and hold $100,000 worth of metal,” explains Kyle Martin, vice president of the Cayman Islands unit. “That makes us sort of unique in this industry.”
The company trades gold, platinum, palladium at a minimum trading limit of 10oz and silver at a minimum order of 1000oz. Hunter Wise has ceased trading copper due to a lack of demand but will reoffer it when demand increases, says Toufic Mansour, director of trading. “The volatility at the moment is in silver and the story is in gold,” he adds.
Hunter Wise does not trade in futures but only in the physical product. However, it offers commodity loan transactions through which investors have the ability to short the market, ie to benefit from falling commodity prices.
In Cayman the firm is set up as an independent company, which means it cannot conduct business on island. With its US sister company Hunter Wise Commodities trading in the US market, all of the Cayman company’s business is done outside of the US and outside of Cayman.
Hunter Wise also maintains a London office which is a branch office of the Cayman company and maintains client relationships in London, China and Singapore.
The focus of the Cayman office is primarily on Latin America and the company is close to doing business in Brazil, which is a notoriously different market for this kind of investment product, says Martin.
Establishing the office in Cayman was done for two reasons, he says. There are tax benefits for shareholders of the company and Hunter Wise gets the name of company into the international markets.
“Being here, being on the east coast time zone, when you are going into the Caribbean, is by far the best place to go.” Martin says the company’s chief operating officer also looked at Bermuda, the Bahamas and St. Martin. “Strictly because of the location, the ease of getting here, being on the east coast time zone, the advantages of the islands itself – it is well developed and a nice place to live – everything outweighed all the other islands.”
Hunter Wise worked with Appleby to register the company in Cayman and now occupies 3,000 square feet of office space at The Grand Pavilion, a size that suggests fast growth.
“We are looking over the next three years of business to have 20 people,” says Martin. “That might be a little bit bold in the current economic situation. Our US company has 25 employees and we anticipate that this company can be three times bigger, simply because the market we aim at has a bigger reach. So we anticipate that we have full staff of at least 20 people here.”
Hunter Wise maintains a 16 hour trade desk, which it seeks to expand to 24 hours a day. For this reason the director of trading Toufic Mansour is immediately looking for at least three more staff to be able to take trades around the clock. Both Martin and Mansour emphasise they are keen to hire Caymanians for these positions. “Coming to a country like this we want to help stimulate the economy and be a good role player down here. Hiring Caymanians is a good way to do that,” says Martin.