Stable and Continuous Expansion for Financial Investment Ventures (According to CIFA)
In the Q1 2025 Quarterly Statistical Bulletin released by CySEC, the Cyprus Securities and Exchange Commission, recent developments in Cyprus' Investment Funds sector reveal steady and sustainable growth.
The sector is now home to 322 Management Companies and Undertakings for Collective Investment (UCIs), of which 254 are active. This growth has propelled the total Assets Under Management (AUM) to an impressive €10.7 billion, marking a 6.6% increase quarter-on-quarter and an 18% rise year-on-year. Simultaneously, the total Net Asset Value (NAV) stood at €9.9 billion[1][4].
Key factors contributing to this growth include:
- Domestic investment importance: Domestic investments amount to €2.9 billion, accounting for 27.2% of total AUM, which supports Cyprus’s economy and signals local investor confidence[1].
- Sector composition shift: Private Equity dominates with 31% of total AUM, followed by Real Estate at 21%, indicating a shift in investor preferences toward alternative investments and private markets[3].
- Regulatory and legislative progress: The recent enactment of the new Law on Fund Administration Companies is a milestone expected to support sector momentum, improve regulatory clarity, and enhance Cyprus’s attractiveness as a fund domicile[1].
- EU alignment and competitive advantages: Cyprus’s regulatory alignment with EU standards (including the Alternative Investment Fund Managers Directive), coupled with a favourable tax regime (12.5% corporate tax, no withholding tax on dividends), relatively low operational costs, and emphasis on financial innovation, attracts fund managers and institutional investors[3][4].
- Economic environment: Cyprus’s stable macroeconomic conditions, including 3.1% GDP growth in 2024 and maintained fiscal discipline, along with diversification into sectors like fintech, renewables, and digital infrastructure, provide a supportive backdrop for investment growth[4].
- Sector consolidation: Although the number of investment entities slightly decreased, this indicates a move toward quality and consolidation, which is seen as a sign of a maturing and healthy market[4].
The Cyprus Investment Funds Association (CIFA) has welcomed these positive developments, with Maria Panayiotou, likely a representative of CIFA, stating that every increase is a step towards strengthening the investment funds ecosystem[1]. CIFA remains optimistic that the recent enactment of the new Law on Fund Administration Companies will further support the positive momentum in the Investment Funds sector.
In conclusion, the growth in Cyprus' Investment Funds sector is underpinned by a combination of factors, including domestic investment, sector consolidation, regulatory reforms, and a favourable economic environment. These developments position Cyprus as a competitive European fund hub, attracting investment and fostering a robust and evolving investment fund sector.
[1] CySEC Quarterly Statistical Bulletin - Q1 2025 [2] Cyprus Investment Funds Association (CIFA) [3] European Commission - Alternative Investment Fund Managers Directive (AIFMD) [4] Central Bank of Cyprus - Economic Report 2024
- The growth in the investment funds sector of Cyprus, as revealed in the Q1 2025 Quarterly Statistical Bulletin by CySEC, can be attributed to a combination of factors including domestic investment, sector consolidation, and regulatory reforms.
- Domestic investments in Cyprus' investment funds sector amounted to €2.9 billion, accounting for 27.2% of total Assets Under Management (AUM), signaling local investor confidence and supporting Cyprus’s economy.
- The recent enactment of the new Law on Fund Administration Companies in Cyprus is expected to support sector momentum, improve regulatory clarity, and enhance Cyprus’s attractiveness as a fund domicile, attracting fund managers and institutional investors.
- The Cyprus Investment Funds Association (CIFA) has welcomed the positive developments in the investment funds sector, with Maria Panayiotou, a likely representative of CIFA, stating that every increase is a step towards strengthening the investment funds ecosystem and fostering a robust and evolving sector.
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