Cyprus Securities and Exchange Commission (CySEC)

Investment Funds sector flourishes in Cyprus as AUM reach €10.7 billion

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The investment funds sector in Cyprus continues to grow. The value of Total Assets Under Management stood at €10.7bn in the second quarter of 2021, recording a 9% increase over the first quarter of the year, according to the latest Quarterly Statistics bulletin published by the Cyprus Securities and Exchange Commission (CySEC).

During the same period, the number of funds licensed by the CySEC also increased. The regulator currently supervises 289 Management Companies and Undertakings for Collective Investments (UCIs), 201 of which pursued investments in the local economy.

More specifically, the Commission supervises 176 Externally Managed UCIs, 51 Internally Managed UCIs and 62 External Fund Managers. The total number of Management Companies includes 33 AIFMs, 72 Subthreshold AIFMs, 4 UCITS Management Companies and 4 dual license entities (AIFMs and UCITS Management Companies).

The UCIs, which are managed by the Management Companies, had a Net Asset Value (NAV) of €8.7 billion. Approximately 54% of the AUM relates to Assets managed by the AIFMs, while 17% are managed by Sub-threshold AIFMs, 22% by AIFMs and UCITS Management Companies, 7% by UCITS Management Companies and only 1% by Regulated UCIs managed by Foreign Fund Managers.

Regarding the UCITSs’ investment policy, they invest heavily in Transferable Securities (86%), followed by investments in Bank Deposits (6%). AIFs, AIFLNPs and RAIFs mainly invest in Private Equity (36.7%), while 12% of the AUM are invested in Real Estate.

There are a total of 172 UCIs in operation. Comprising 75% of the total AUM, there are 155 UCIs domiciled in the island (10 UCITS, 53 AIF, 62 AIFLNP and 30 RAIF). From the total of 172 UCIs managed by UCIs Management Companies, 128 invest in Cyprus either entirely or partially, and €2.3 billion (21.8%) are investments made in Cyprus.

The 54% of the investments in Cyprus are in Private Equity, while 13% are in Real Estate. When it comes to categorising unit-holders, the majority of UCITs are Retail Investors (99.4%), while for AIF, AIFNLP and RAIF, 36.1% of them are Professional Investors, 51.7% Well Informed Investors and only 12.2% Retail Investors

Finally, regarding the specific sectors that UCIs invested in during the 2 nd quarter of 2021, the AUM in the Energy sector totalled €346m (3.24% of total AUM), while €29.1m was invested in Fintech (0.27% of total AUM), €35.9m in Shipping (0.34% of total AUM), €36.9m in the Sustainability sector (0.35% of total AUM) and €6.6m in Cryptocurrencies (0.06% of total AUM), the CySEC data revealed.

Cyprus CySEC DATA
(Sources: CySEC, CIFA)

Andreas Yiasemides, President of The Cyprus Investment Funds Association (CIFA) said in a statement that CIFA is pleased by the steady growth both of the number of assets under management, as well as the number of fund structures licensed and active in Cyprus.

“Along with a series of upcoming regulatory improvements, we are confident that the sector will maintain its fast-paced growth and will considerably contribute towards the speedy recovery of the Cyprus economy” he added.

CIFA was established in February 2013 and registered as an Association in April of the same year under the Associations and Foundations Law  of 1972, with the purpose and aspiration to become the collective voice and the reference point for all professionals and legal entities, offering services or engaged in the Investment Funds Industry in Cyprus.

CySEC was established in accordance with section 5 of the Securities and Exchange Commission (Establishment and Responsibilities) Law of 2001 as a public legal entity. Following a Council of Ministers decision, Dr. George Theocharides has been appointed yesterday (Sept. 15) as the new Chairman of the CySEC, succeeding the incumbent Ms Demetra Kalogerou. George Karatzias was appointed as CySEC’s Vice Chairman.