Travelling to the notorious tax haven, Katy Lederer looks for signs of the mogul who has been secretively snapping up property across the archipelago for decades
One humid Tuesday in July, I summited the highest point on Grand Cayman, an eight-storey dump known affectionately by the locals as Mount Trashmore. From the top of the foul mound – a collection of almost every piece of rubbish discarded on the island since it went all-in on financial services in the 1960s – I imagined I could just make out the enshrouded beach estate of the secretive investor Kenneth Dart.HT: there was no identifying tag but it's possible it came via FT Alphaville's Jemima Kelly angling for an island visit other than the one I've been pitching, Orkney, in the winter, to explore the wonders of hydrogen.
I had been on Grand Cayman for more than a week, but I was no closer to speaking with him than when I arrived. The heir to a famously private foam-container dynasty and a reclusive businessman in his own right, Mr Dart apparently hasn’t spoken to the press since 1993. Although he has lived on Grand Cayman for 25 years and is widely believed to be the biggest private landholder on the archipelago, only a few people I interviewed were sure they had seen him. Residents compared him to Batman, Howard Hughes, a Bond villain and both Warren and Jimmy Buffett.
Mr Dart lives on Seven Mile Beach, in an old hotel – the entire hotel – once known as the West Indian Club. He acquired the property in 1994 after renouncing his US citizenship, a tax dodge so audacious it inspired federal legislation. Although Cayman was initially a refuge for the financier, Mr Dart, who is thought to be 64, has taken to his adopted home with zeal. With his fortune and his company, Dart Enterprises, he has increasingly come to define the islands’ future.
In 2007, he opened a major development, a sprawling mix of retail and entertainment venues called Camana Bay, and began amassing a portfolio of high-end properties. His list now includes the Ritz-Carlton, the Yacht Club and a new Kimpton resort. In February, his group proposed a $1.5bn (£1.2bn) “iconic skyscraper” that would rival the Eiffel Tower and the Burj Khalifa of Dubai.
As a place to conduct business, Cayman’s appeal is obvious. The country, a British Overseas Territory, levies no income or corporate taxes, and, since the 1960s, it has become one of the world’s most sophisticated banking centres. While Cayman was once a shady place to stash illicit cash – a reputation cemented by the 1991 John Grisham novel The Firm and a subsequent Tom Cruise thriller – it has long since moved aggressively upmarket, courting institutional investors, private equity and trading firms seeking to minimise taxes and bureaucracy. As of 2016, according to one analysis, it domiciled 60 per cent of global hedge fund assets.
But for his base of operations, Mr Dart has chosen an existentially vulnerable piece of land. At 76 square miles, Grand Cayman is roughly the size of Brooklyn and is, on average, only 7 feet above sea level. In 2004, Ivan, a Category 5 hurricane, submerged most of the island. The damage was valued at close to $3bn (£2.3bn). Bodies buried in beach cemeteries floated out to sea. Animals escaped their enclosures, and, to this day, rewilded chickens roam the islands.
“Problem is, even if hurricanes don’t get any more prevalent, they’ll get stronger,” said James Whittaker, a Caymanian who is a former banker and regulator turned clean energy entrepreneur. “If sea-level rise is a foot, well, that means that a Category 1 now is going to do the same damage that a Category 4 used to do.” Even if Cayman built enough infrastructure to survive the rising water, he added, “The problem is insurance. You’ll never be able to insure the country anymore.”
As I stood atop Mount Trashmore, looking out at the crystalline water, I wondered what Mr Dart thought about the country’s vulnerability to rising seas. Or if, like me, he had quickly fallen into a tropical reverie – a feeling that nothing could possibly go wrong on this exclusive stretch of paradise. Would a wildly successful investor like him buy up so much of a country that was really doomed to disappear?
‘A Caymanian dream’
Until the 1960s, when the first banking laws were put in place to attract international capital, the Cayman Islands was a backwater, with an economy dependent on seamen who would send their remittances back home. When a Cambridge-trained lawyer named William Walker arrived in 1963, he described the place as having “cows wandering through Georgetown, only one bank, only one paved road, and no telephones.” The population was just over 8,000, and the mangrove-covered island was swarming with mosquitoes....MUCH MORE
I think she went to Davos instead.
