Cyprus has seen its assets under management (AuM) double in the last two years from €3.9bn in 2017 to €7.6bn in the third quarter of 2019, according to the latest figures by the Cyprus Securities and Exchange Commission (CySEC).
There are now 203 management companies and Undertakings of Collective Investments (UCIs) in Cyprus - up from just 13 companies five years ago. From these, 130 companies have operations. The total number of companies includes 104 Externally Managed UCIs, 58 Internally Managed UCIs and 41 External Fund Managers. The total number of Management Companies includes 28 AIFMs, 67 Sub-threshold AIFMs and 4 UCITS Management Companies.
The total AuM for the third quarter of 2019 reached €7.7bn, recording a 12% increase compared to the second quarter of 2019, while the UCIs, managed by the Management Companies, had a Net Asset Value (NAV) of €5.6bn.
This is further evidence that Cyprus is gaining a reputation as a safe and stable investment location and the investment fund sector in the country is growing to a European standard"
According to the report, more than 50% of domiciled AuM relates to private equity and venture capital investments due to the low set-up and maintenance costs, local expertise and the favourable tax regime.
The combined efforts of CySEC, the Ministry of Finance of Cyprus, Invest Cyprus and CIFA has led to modernization of the regulatory framework governing collective investment schemes, upgrading Cyprus to one of the most favourable and flexible destinations for setting up or relocating investment funds and fund managers, the Cyprus Investment Funds Association (CIFA) said in a statement.
"This is further evidence that Cyprus is gaining a reputation as a safe and stable investment location and the investment fund sector in the country is growing to a European standard," George Campanellas, vice-president of the Board of Directors at Cyprus Investment Funds Association (CIFA) and director general of Invest Cyprus, said.
"The strategic position of Cyprus and the plethora of signed double tax treaties that allows for direct investments in the EU and in developing countries throughout the Middle East make Cyprus an attractive jurisdiction for setting up Alternative Investment Funds," he added.
New legislation governing Alternative Investment Funds has aligned the Cyprus funds industry with the recent EU and international developments and trends. This new legislation takes into account the best practices of renowned jurisdictions specializing on investment funds.