Cyprus is witnessing impressive growth in the investment funds sector as according to the latest data, total assets under management amounted to €10.7billion in the second quarter of 2023, Chief Scientist for Research, Innovation and Technology Demetris Skourides stressed on Monday during the opening of the 9th International Funds Summit and EXPO in Limassol.

In his keynote address, Chief Scientist for Research, Innovation and Technology said that the government firmly believes that research, innovation and technology are key drivers of a thriving and resilient economy and underlined that this is exactly the why it focuses on attracting tech companies to Cyprus, “an economy that was recently upgraded to investment-grade status by international rating agencies”.

Demetris Skourides noted that Cyprus’ strengths towards this effort include linkages with innovative SMEs collaborating with others, a sector in which our country marked the highest performance EU-wide, attractive research systems, strong innovation in product development and business process innovation.

At the same time, he added, Cyprus ranks 28th out of 132 economies in the latest Global Innovation Index and 2nd in North Africa and the Middle East.

Chief Scientist for Research, Innovation and Technology reminded that the government has committed to establish Cyprus as a regional innovation and tech hub through a series of policies, and that central to this, is the country’s long-term strategy, Cyprus Vision 2035, which aims to turn the island into a powerhouse of innovation, supported by digitalization and thus, one of the world’s best countries to live, work and do business in.

He also noted that Research and Innovation Foundation is providing the Cypriot ecosystem with a much-needed boost through its wide range of funding programs and support services that aim to the creation and initial development of innovative start-ups, rapid growth of those who intend to develop globally competitive innovative products and services, and the development of innovative products or services with potential for quick global market penetration.

“The figures speak for themselves: RIF launched a new framework of funding programs for the period 2021-2027, allocating another €150m to targeted investments in various sectors including research, collaboration, knowledge transfer, innovation, infrastructure and capacity development, as well as internationalization” he added.

Cyprus Investment Funds Association (CIFA) Andres Yiasemides, opened the works of the Summit indicating that this year's summit aims to provide the participants with the knowledge and tools to navigate the increasingly complex environment. 

He also stressed that despite the global challenges, Assets Under Management (AUM) have reached an impressive €10.7 billion by the end of the second quarter of 2023, marking a remarkable 175% growth since 2017 with the total number of licensed companies reaching 335. According to Yiasemides, even more promising is the growth in the number of licensed companies engaged in activities, now at 254 compared to 237 in the same period last year.

CIFA President noted that the Association has observed a growing trend of fund managers from diverse geographical areas choosing Cyprus, recognizing its substantial advantages as a fund jurisdiction. “Notably, we've seen increased interest from Indian, Middle East, and Japanese fund managers in establishing a presence in Cyprus” he said, underling that services and, more recently, the Global Maritime Fund, aiming to become the world's largest maritime fund, have chosen Cyprus as their home base.

Vice Chairman, Cyprus Securities and Exchange Commission (CySEC) George Karatzias, said that in the second quarter of 2023, the number of Management Companies and Undertakings of Collective Investments (UCIs) was 334, with the assets under management surpassing €10.7 billion and that a total of 162 UCIs invest in Cyprus either partially or entirely and these investments amount to €2.8 billion just over a quarter of the total Assets Under Management.

“This is a significant percentage compared to other fund hub jurisdictions” he stressed, indicating that approximately 90% of UCITS Assets under Management were invested in Transferable Securities, the remaining balance being split between UCITSs and UCIs (5.5%),  and bank deposits (4.2%).

“Regarding the AIFs just under half of the Assets Under Management (48.3%) related to investments in Private Equity, with investment in Hedge Funds representing 9.8%, Real Estate 9.3%, and Investments in Funds of Funds accounting for 9.1%, of the total Assets Under Management,” he added.

CySEC Vice Chairman reminded that last June, ESMA released a report analysing the provision of cross-border investment services during 2022, where Cyprus ranked first in Europe.  Something that demonstrates, as he stressed, the size of the industries regulated but also the responsibility undertaken.

“It is of utmost importance that CySEC has all the weapons in its quiver made available both in terms of human resources and technology to ensure the continuity of its enhanced supervisory responsibilities,” he noted. 

He also stressed that CySEC remains at the forefront of the latest European financial legislation, making Cyprus a safe, responsible and competitive place to do business globally. “We remain committed to support the responsible and healthy growth of the investment funds and managers industry in Cyprus,” he concluded.

Cyprus Investment Promotion Agency “Invest Cyprus” CEO Marios Tannousis noted that this year has been marked by significant volatility in the world of investment funds.

“Both on a global scale and here in Cyprus, we have adeptly navigated the seas of uncertainty, embraced revolutionary and innovative financial products, adapted to a continually evolving regulatory landscape, and pivoted with strategic shifts that have reshaped the industry,” he said, underlining though that “far from remaining a passive observer, Cyprus has provided proactive contributions to the global discussions.”

“At Invest Cyprus, our commitment to the Investment Funds and Asset Management Sector remains unyielding,” he said and explained that the present era goes beyond financial progress as it is about progress that counts for the planet and its people. As Invest Cyprus CEO noted, sustainability and impact investing are no longer niche areas of interest but are rapidly becoming integral to the mainstream investment ethos.

He also stressed that Invest Cyprus recognises the undeniable momentum behind these movements and that ss the world shifts towards a more sustainable future, Invest Cyprus is poised to harness the vast potential of sustainable finance, attracting investments that seek both financial returns, but also tangible environmental and societal benefits.

The 9th International Funds Summit and EXPO takes place in Parklane, Limassol 23-24 October 2023.