Cyprus Investment Funds are on the rise since 2017, this can be seen by the Central Bank of Cyprus (“CBC”) statistics as well as the authorized Cyprus Investment Funds disclosed on the website of the Cyprus Securities and Exchange Commission (“CySEC”).
Cyprus Investment Funds Statistics
Taking into account the following factors:
- Total Assets Under Management (“Total AUM”)
- Number of reporting entities
Then we can see that the Cyprus Funds Industry has grown in two years by 100% with the total assets under management increasing by € 2.7 Billion to reach a Total AUM of €5.4 Billion.
Interesting to note is that the number of reporting entities also grow by 47% and in actual numbers to 51 new entities.
| Growth Rate between Q2-17 and Q2-19 | % | Actual |
| Growth of Total AUM | 49 | € 2,7B |
| Growth of Reporting Entities | 47 | 51 |
Interesting fact is that in 2017, 109 funds held a Total AUM of € 2.7 Billion; while 51 additional reporting entities have contributed an equal amount (i.e. € 2.7 Billion). This might be interpreted as an indicator of the size of funds set-up between this period and or that the existing fund activities have grown.
| Total AUM | Number of Reporting Entities |
|
| Size of Funds in Q2 2017 | €2.7B | 109 |
| Size of Funds in Q2 2019 | €5.4B | 160 |
What asset classes do the Cyprus Investment Funds Hold
Equities
Cyprus equity investment funds predominantly invest in shares and other equity. While investment funds whose primary strategy is equities have grown the least in the last two years, the actual value of investments is second only to real estate during the period in question. Because Cyprus does not apply any capital gains tax or income tax on the profits from the disposal of equities this category has the highest growth potential in the medium to long term.
| Q2-2017 | Q2-2019 | Growth | Actual |
| €1,827m | €2,186m | 20% | €359m |
Bond
Cyprus bond investment funds primarily invest in debt securities. Interest income is taxable in Cyprus and as such not a preferred jurisdiction for these types of investment funds.
| Q2-2017 | Q2-2019 | Growth | Actual |
| €110m | € 152m | 38% | €41m |
Mixed
Cyprus mixed funds are investment funds investing in both shares and debt securities with no prevalent policy in favour of one or the other instrument. In the period in question, we notice a strong growth for this asset type.
| Q2-2017 | Q2-2019 | Growth | Actual |
| €415m | €621m | 49% | €205m |
Real Estate
Cyprus real estate funds are investment funds primarily investing in real estate. Perhaps driven by the Cyprus Citizenship Programme or other Cyprus NPL restructurings conducted by the banks the total AUM has grown by 63% and further benefited other segments of the Cyprus economy.
| Q2-2017 | Q2-2019 | Growth | Actual |
| €210m | €580m | 176% | €370m |
Other
Other investment funds are other than those mentioned above.
| Q2-2017 | Q2-2019 | Growth | Actual |
| €210m | €1,948m | 827% | €1,738m |
Will the growth continue?
The constant issue with growth is to maintain and sustain it. This is the true question and consideration, furthermore even with such a strong track record Cyprus’s investment fund world is still a minute compared to Ireland and Luxembourg, each holding more than €4 Trillion of assets under management.
Nevertheless, the Cyprus Investment Funds world has a role to play in the global and regional market with a focus on start-up and new managers since the local market promises more affordable pricing and government support.