Cyprus Investment Funds: Growing strong
The Cyprus Investment Funds industry remains on a growth path. According to the latest Quarterly Statistics bulletin published by the Cyprus Securities and Exchange Commission (CySEC), the value of Total Assets Under Management reached €8.58bn in the 4th quarter of 2020, recording a 10.3% increase over the 3rd quarter of the same year, and a 3.8% increase when compared to the 4th quarter of 2019.
The statistical bulletin is available on the CySEC website, and presents the most important data on the Collective Investments sector in Cyprus. Based on the statistics for the 4th quarter of 2020, CySEC has 283 Management Companies and Undertakings of Collective Investments (UCIs) under its supervision, of which 197 have operations. More specifically, it supervises 164 Externally Managed UCIs, 56 Internally Managed UCIs and 63 External Fund Managers. The total number of Management Companies includes 31 AIFMs, 81 Subthreshold AIFMs, 3 UCITS Management Companies and 4 dual license entities (AIFMs and UCITS Management Companies). A new regulatory category was introduced in the statistics for the 4th quarter of 2020, following the 2020 Law that came into effect on 3 July 2020, regarding the Small Alternative Investment Fund Managers, the so-called Small AIFMs. There are 17 Small AIFMs that represent CIFs, which had received their approval from CySEC for the provision of AIF management functions based on Section 5(5)(b) of Law 87(I)/2017, and which are considered Small Managers following the implementation of the 2020 Law regarding the Small Alternative Investment Fund Managers. The Total Assets Under Management (AUM) for the 4th quarter of 2020 reached €8.58 billion, recording a 3.8% increase compared to the 4th quarter of 2019, and a 10.3% increase since the 3rd quarter of 2020. The UCIs, which are managed by the Management Companies, had a Net Asset Value (NAV) of €6.99 billion. Approximately 52.5% of the AUM relates to Assets managed by the AIFMs, while 22.1% are managed by Sub-threshold AIFMs, 20.7% by AIFMs and UCITS Management Companies, 3.9% by UCITS Management Companies and only 0.8% by the Regulated UCIs that are managed by Foreign Fund Managers. Regarding the UCITSs’ investment policy, they invest heavily in Transferable Securities (81%), followed by investments in Bank Deposits (10%). AIFs, AIFLNPs and RAIFs mainly invest in Private Equity (43%), while 14.7% of the AUM are invested in Real Estate. There are 165 UCIs in total with operations. Comprising 71% of the total AUM, there are 150 UCIs domiciled in Cyprus (11 UCITS, 48 AIF, 70 AIFLNP and 21 RAIF). From the total 165 UCIs managed by UCIs Management Companies, 119 invest in Cyprus entirely or partially, and €2.15 billion (25.1%) are investments made in Cyprus. The 54% of the investments in Cyprus are in Private Equity, while 14% are in Real Estate. When it comes to categorising unit-holders, the majority of UCITs are Retail Investors (99.3%), while for AIF, AIFNLP and RAIF, 40.2% of them are Professional Investors, 49.3% WellInformed Investors and only 10.5% Retail Investors. Finally, regarding the specific sectors that UCIs invested in during the 4 th quarter of 2020, the AUM in the Energy sector totalled €246.2m (2.86% of total AUM), while €29.9m was invested in Fintech (0.35% of total AUM), €72.1m in Shipping (0.84% of total AUM), €28.1m in the Sustainability sector (0.32% of total AUM) and €1.5m in Cryptocurrencies (0.017% of total AUM).