The optimistic messages for the upward course and development of the Investment Funds sector in Cyprus continue. The interest of managers and Investment Funds for operation and registration in Cyprus continues to be intense, with the president of the Cyprus Association of Investment Funds (CIFA) Andreas Giasemidis, commenting that with the various upcoming legislation the country will become an even more attractive destination.
It is recalled that, according to the latest data of the Hellenic Capital Market Commission, at the end of March 2021, the assets under management of the Investment Funds reached the record level of 9.8 billion euros, while the Collective Investment Organizations (CIS) with activities increased to 166. At the same time, a significant number of licensing applications from organizations – about 50 – are under consideration by the Hellenic Capital Market Commission.
Developments, such as the forthcoming legislation on the performance of management functions of collective investment undertakings, will complete the relevant regulatory framework, which is expected to further strengthen the interest, with Cyprus becoming the fastest growing destination for European Investment Funds.
“As a destination we have nothing to envy from other European countries, despite the fact that the latter have developed this sector for decades and have been established in the eyes of investment fund managers. On the contrary, Cyprus has become particularly attractive, as in addition to the high quality direct and indirect professional services it offers, it remains highly competitive in terms of cost, as both the cost of establishment and operation is much lower than in destinations such as Luxembourg and Ireland, which are traditional centers for Investment Funds in Europe. “Especially for small and medium-sized funds, the cost factor is particularly important”, Andreas Giasemidis explained to “P”.
Although the worldwide restrictive measures due to the pandemic, as well as the travel ban for many months, have dramatically changed the way Cyprus is promoted abroad, but also the way in which professional services are conducted, the Investment Funds sector maintained momentum. Indicatively, the members of CIFA, which was founded only in 2013, now approach 400.
“As CIFA, we remain committed, with prudence and seriousness, to our work, which is nothing more than the promotion of Cyprus as an international center of Investment Funds. “These are organizations that manage tens and hundreds of millions, some billions, therefore, both the service providers and the Supervisory Authority must continue to work methodically and with a rational approach”, the president of the association emphasizes, expressing, at the same time, the optimism that the medium-term goal set to increase the assets of the Investment Funds to 25 billion euros can be achieved if the efforts continue to be just as mature, intense and efficient.
Headquarters for funds and managers
So far, a few dozen managers from different geographical areas have chosen Cyprus as their base. In recent months, there has been considerable interest from managers in the UK over Brexit, which has been transformed into action.
At the same time, the strategic promotion plan implemented by CIFA, is extended to many other markets, with significant prospects for further development in the sector. An example is the huge Indian market, which is already showing increasing interest following a recent decree by the Indian government, which enables Indian Interest Investment Funds to invest in the European Union (EU) via Cyprus.
Respectively, investors from EU countries and beyond will now be able to invest in the huge Indian market, through collective investment schemes, which they will create in Cyprus. There are also opportunities in other markets, such as Greece, with which the existing economic ties are known.
Already, a number of Greek groups have invested in Cyprus through investment funds. There are also significant prospects from neighboring Israel, as administrators there can take advantage of the fact that through Cyprus they gain access to the European market.
Even the distant USA is a priority market for CIFA and its members, as US investment funds can use Cyprus as their base for investment, both within the EU and in countries in the wider geographical area.
The data show that Cyprus is evolving into a cross-border platform of investment funds. According to data from the European Fund and Asset Management Association (EFAMA), at the end of 2020, 47% of the net assets of the Cypriot Investment Funds were related to cross-border investments.
“This trend shows that Cyprus is evolving into the new European destination for international investment funds, as only Ireland (92%), Luxembourg (92%) and Malta (76%), destinations that provide services, have higher rates. in investment funds for decades.
International collaborations
The fact that Cyprus is gaining ground and international recognition in the field is evident from the fact that the largest cross-border platforms for investment funds have approached CIFA for the implementation of joint information and training laboratories. “We work with the largest international organizations in the field, such as Refinitiv of the London Stock Exchange Group, Bloomberg and Clearstream. At the same time, we organize promotional events with international speakers and participants, in order to constantly present the advantages of Cyprus and the sector abroad “.
They are investing in the Cypriot economy
Particularly important is the fact that, out of the total of 166 OSE with activities, 123 invest in Cyprus in part or in full, with their domestic investments corresponding to 2.2 billion euros (22.8% of the total Assets Under Management).
“Apart from tangible investments, the side benefits from the development of the sector should be of special and possibly greater importance. Such benefits include increasing government revenues from sources that were not even available until 2016, creating new jobs such as investment managers, compliance officers, risk managers, etc., and increasing the work of support service providers such as lawyers and accountants. “, Noted the president of CIFA.
