Cyprus a Credible Base for Investment Funds and Asset Managers


The 4th International Funds Summit that took place on 11-13 November in Nicosia, confirmed the especially positive outlook for Cyprus with regards to the investment funds industry. More than 500 leading professionals of the industry attended the summit, representing funds based in Europe, the Middle East, North Africa, Asia, Russia and the United States, among others.

In the framework of the summit, it emerged that Cyprus can be a credible and attractive base for investment funds and asset managers around the world. It was further indicated that Cyprus is an attractive and alternative base for UK-based investment funds and managers, who wish to expand or remain in the EU after Brexit.

Speaking at the summit, the Chairman of the Cyprus Investment Funds Association (CIFA), Angelos Gregoriades, highlighted the fact that in the past few years, investment funds established in Cyprus have risen by nearly 70%, from 13 in 2013 to 172 in 2018. At the same time, total assets under management increased to €5.7b, recording a 90% increase. He underlined that the healthy growth of the fund management industry in Cyprus has been driven by regulatory changes and improvements including new provisions of the Double Tax Treaty with the UK and tax benefits for asset managers relocating to the island. According to Gregoriades, confidence in the sector has also been boosted by the announcement that Cyprus funds, UCITS and AIFs will be eligible to be listed on Clearstream’s Vestima fund processing platform. Vestima is the world's largest cross-border fund processing platform with more than 190,000 investment funds from 43 jurisdictions. “This is another leap forward for the Cyprus fund industry following the initial listing in June 2018 of more than 35 Cyprus domiciled funds on the Thomson Reuters platform,” Gregoriades said.

Gregoriades further highlighted that the investment fund industry is now at a crossroads, enjoying rising markets and growing pools of capital while also navigating significant disruption due to emerging external factors such as innovation, technology and regulation. “If our industry has been able to grow, it is due to a constant drive to improve quality in our products and services. A big challenge will be to adapt to the wave of new regulations that is coming our way without losing momentum when it comes to creating new products that meet client expectations”, he underlined. He further noted that fintech solutions being adopted by Cyprus are rapidly reinventing the value chain and providing new ways to enhance the customer experience, to make service delivery more cost effective and to improve the efficiency of back office functions.

The Minister of Finance also addressed the summit, emphasising the fact that by the end of the year, the Cypriot economy will have grown by 16% of GDP. “We have more than covered the lost ground and, if all goes well, we expect growth to remain above 3% annually for the next three years. These rates make Cyprus one of the fastest growing economies in the EU,” the Minister of Finance said.

Following the completion of the summit’s proceedings, an informative presentation was given on Cyprus’ integration in Clearstream’s fund processing platform. Marios Tannousis, member of the Board of Directors and Board Secretary of CIFA, analysed the importance of this upgrade for Cyprus, highlighting that this is the result of an intense negotiation process with Clearstream that lasted for about a year. On behalf of Clearstream, the head of the Investment Funds Services, Bernard Tancre, presented the advantages of the platform and explained how Cyprus can benefit from them. As Mr Tancre indicated, Clearstream has already announced the addition of Cyprus in its network.

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