Cyprus Investment Funds report growth in a pandemic environment

With an annual increase of 48.7 per cent of assets under management, a significant number of Investment Fund managers from abroad choose Cyprus as their base

Published: Tue 21 Dec 2021, 9:07 AM

Τhe investment funds sector in Cyprus was significantly strengthened during 2021, even though the consequences of the pandemic and the uncertainty continued. The sector is now established as one of the most promising of the Cypriot economy and one of the fastest growing at a European level.

Assets under Management (AuM) of Cypriot investment funds amounted to €11.6 billion at the end of the third quarter of 2021, proving that Cyprus continues to be one of the fastest growing destinations for investment organisations and their managers. On an annual basis, and during pandemic conditions, AuM increased by 48.7 per cent.

The country’s recognisability is now clear from the investment organisations that choose Cyprus as their base. In recent years, dozens of fund managers, from various geographical areas, have chosen Cyprus, recognising the remarkable advantages it offers as a destination. According to the Cyprus Securities and Exchange Commission (CySEC), the total number of licensed management companies and undertakings of collective investments amounted to 298 at the end of the 2021 quarter, which implies an annual increase of 9.1 per cent.

The Cyprus Investment Funds Association (CIFA) expressed its satisfaction with the sector’s course and believes that its upward but sustainable growth will continue in 2022. CIFA, responding to the positive developments and the tangible interest it observes, will continue to implement its strategic promotion plan, while setting advanced and realistic goals.

Continuous upgrades and modernisation of the legislative and tax framework that governs collective investments, put Cyprus at par with other European destinations. In fact, the cost of establishment and operation of these organisations is much lower in Cyprus compared to other competing EU destinations. It comes as no coincidence that, according to data from the European Fund and Asset Management Association (EFAMA), 47 per cent of the Cypriot Investment Funds net assets were related to cross-border investments in 2020. This ranks Cyprus fourth in Europe, with Ireland, Luxembourg, and Malta being the only European countries ahead.

At the same time, the sector has made significant contribution to the recovery of the Cypriot economy. Approximately 140 collective investment organisations invest in Cyprus in part or fully, with the full amount reaching to €2.3 billion at the end of the third quarter of 2021 —19.5 per cent of total AuM).

What the professionals of the sector are eager to see materialising in the new year, is the enactment of the legislation that will govern the supervision and regulation of the fund administration services profession. This development will complete the legal framework of the sector, providing an additional level of security to both investors and the managers themselves. At the same time, the international developments in the investment sector are constantly evaluated and the association submits suggestions and improvement proposals, where necessary.

“During the new year ahead, we will continue our targeted actions to extend the promotion of the sector abroad, in specific markets which present concrete prospects. The Cypriot Investment Funds’ assets have already approached €12 billion, under adverse conditions, and this makes us very confident that with correct and stable steps, we will achieve the medium-term goal we have set: to raise the assets of the Funds in Cyprus to €25 billion,” commented CIFA’s President, Andreas Yiasemides. “Furthermore, it satisfies us to note that so many managers from abroad choose Cyprus as the basis for their operations and we hope that in 2022 there will be additional and significant developments in relation to international organisations that provide services to investment funds’’, he added.