Key Insights from Uncorrelated Alts Puerto Rico 2025

The Uncorrelated Alts Puerto Rico 2025 conference, held from March 30th to April 1st in vibrant San Juan, brought together over 300 influential voices from the hedge fund and private equity sectors. As the region continues to emerge as a compelling destination for investment and innovation, this year's gathering offered a deep dive into the forces shaping Puerto Rico’s financial future. From the growing wave of fund managers relocating to the island, to opportunities for fintech disruption, renewed scrutiny of the century-old Jones Act, and the broader investment potential across the Caribbean—these conversations painted a dynamic picture of both challenges and untapped potential.

1. Relocation and Return to Puerto Rico:

Puerto Rico has increasingly positioned itself as a magnet for financial talent and firms, thanks in large part to its attractive tax incentives, combined with a high quality of life and improving infrastructure. This has drawn a growing number of hedge fund and private equity managers—some relocating from major financial hubs like New York or Miami, and others returning to the island with renewed purpose and opportunity.

While challenges remain, particularly in areas like power grid stability and broader infrastructure resilience post-Hurricane Maria, significant progress has been made. The availability of local talent, coupled with a growing network of professionals on the ground, has made it increasingly feasible for firms to build a serious presence on the island.

However, for many of the more specialized needs—legal counsel, regulatory compliance, fund administration, and audit support—firms still rely heavily on mainland service providers. This presents a unique opening for agile professional services firms willing to deepen their understanding of the Puerto Rican market and offer high-quality, locally attuned support. Those who do will be well-positioned to grow alongside this expanding financial ecosystem.

2. Disruption of the banking system:  

Puerto Rico’s banking system has long been dominated by a small number of traditional institutions, with one bank in particular holding a disproportionate share of the government’s deposits and public sector transactions. This concentration has created a rigid system that is often slow to innovate and lacks the flexibility that modern investors and businesses demand.

However, this status quo is now being challenged. As digital transformation reshapes the global financial services landscape, fintech firms see Puerto Rico as fertile ground for innovation. With a relatively underserved population in terms of digital banking options, and a regulatory environment that is increasingly open to modernization, fintech companies have the potential to bring speed, transparency, and inclusivity to the island’s financial infrastructure.

Opportunities abound in areas such as mobile banking, digital wallets, blockchain-based payment solutions, and alternative lending platforms. These technologies can help reduce friction in day-to-day banking and expand access to capital, particularly for small and medium-sized businesses that often face hurdles with legacy institutions.

Still, significant challenges remain. Navigating federal and local regulatory requirements, gaining the trust of consumers accustomed to traditional banking, and building partnerships with local stakeholders are essential for fintech entrants hoping to scale. Moreover, education and digital literacy efforts must be prioritized to ensure widespread adoption and equitable access.

Ultimately, the disruption of Puerto Rico’s banking system isn’t just about replacing old institutions—it’s about reimagining how financial services can empower individuals, businesses, and the broader economy. As this transformation gains momentum, the island could become a standout case study in how technology-driven finance reshapes emerging markets.

3. Jones Act:

A recurring theme during the conference was the long-standing economic friction caused by the Jones Act—a nearly century-old maritime law that requires goods transported between U.S. ports, including Puerto Rico, to be shipped on vessels that are U.S.-built, U.S.-owned, and U.S.-crewed. While originally designed to protect the domestic shipping industry, the Act has had significant unintended consequences for Puerto Rico.

Critics argue that it inflates the cost of goods on the island, limits competition in the shipping market, and creates unnecessary supply chain inefficiencies. With inflationary pressures and global shipping disruptions still fresh in the minds of investors and policymakers alike, there’s a growing call to revisit this legislation and explore possible exemptions or reforms that would allow Puerto Rico to better compete in today’s interconnected global economy.

Reforming or repealing the Jones Act could lower transportation costs, reduce prices for consumers, and improve the overall ease of doing business on the island—making Puerto Rico more attractive not just to investors, but also to companies seeking a strategic location for logistics and distribution throughout the Americas. While politically complex, momentum around this issue appears to be building, and many conference attendees viewed it as a key area to watch in the coming years.

4. Other Caribbean areas:

While Puerto Rico rightly earned the spotlight at this year’s conference, the broader Caribbean region is also emerging as a dynamic investment frontier. Investors are increasingly looking beyond traditional sectors and locations, drawn by a combination of natural beauty, growing tourism, favorable regulations, and infrastructure needs.

Real estate remains a major draw, with high demand for hotels, resorts, retirement communities, and residential developments in prime vacation destinations. Meanwhile, infrastructure projects—ranging from transportation and utilities to broadband and green energy—are becoming increasingly attractive as governments in the region partner with private capital to modernize essential services.

Countries such as the Cayman Islands, British Virgin Islands, and the Bahamas have taken bold steps to position financial services as a cornerstone of their economies, second only to tourism. These jurisdictions offer sophisticated legal and financial frameworks, favorable tax regimes, and an investor-friendly mindset, making them appealing hubs for fund structuring, administration, and financial innovation.

As regional collaboration grows and capital continues to flow into the Caribbean, investors who take a long-term, strategic view of the region’s potential stand to benefit from both strong returns and meaningful impact.

STP's Role in Shaping the Future of Investment Operations:

At STP, we’re proud to support the evolving needs of firms operating in Puerto Rico and across the Caribbean. The insights shared at Uncorrelated Alts Puerto Rico 2025 reflect a region on the cusp of transformation—and we’re committed to helping our clients navigate that change. Whether it's easing operational complexity, ensuring regulatory compliance, or scaling efficiently, our solutions are built to meet the demands of a rapidly shifting investment landscape. By focusing on adaptability and forward-thinking technology, we empower our clients to remain resilient, agile, and ready for what’s next.