The hedge fund industry has risen in 2007 to the top of the international political agenda, yet the debate surrounding it is limited by a lack of understanding of how the industry functions, or even how it is to be defined. The industry consists largely of investment funds operating from offshore locations, especially the Cayman Islands, for reasons of tax, but also because the disclosure requirements are low. Thus the industry has acquired a reputation for tax u0091shynessu0092 coupled with a tendency towards secretiveness. At the same time, the industry has grown rapidly and now controls, it is estimated, close to u00802 trillion of assets. Understandably this combination of rapid growth and a lack of transparency have caused unease within European business and political circles.