Cyprus Investment Funds Statistics – November, 2019

The Statistics Department of the Central Bank of Cyprus (CBC) released its November 20th, 2019 update on Investment Funds statistics.

The statistics are presented into the following 5 tables:
1. Investment funds balance sheet data: assets
2. Investment funds balance sheet data: liabilities
3. Investment funds total assets/liabilities, by nature of investment
4. Investment funds total assets/liabilities, by type of investment fund
5. Investment funds total assets/liabilities, UCITS/Non-UCITS breakdown
with their reporting frequency being quarterly, and the current data set period includes data until the end of September 2019.

The Investment funds balance sheet data: assets table
The total assets outstanding at the end of September 2019, were reported at 5,686.3 million EUR. This is double the total assets reported 2 years ago at the end of September 2017 of 2,740.7 million EUR – an increase of 107.48%. Since then, the statistics reported by CBC show a consistent trend of growth in total assets in Investment Funds in Cyprus, except for a drop of 1.4% in the period ending December 2018.

The data on the number of reporting entities over the same 2-year period, end of September 2017 – end of September 2019, validate this trend of growth with a consistent positive increase reported quarter over quarter. This has resulted in 166 entities from 108 – an increase of 53.7%.

Figure 1 below, combines these 2 data sets with
– the y-axis on the left and the bars along the x-axis showing the Total Assets in EUR million, outstanding,
– the y-axis on the right and the line along the x-axis showing the Number of Reporting Entities,
at the end of each period.

Figure 1 – The progress of Total Assets in EUR million (bars), outstanding at end of period and the Number of Reporting Entities (line) since end of June 2008 until end of September 2019.

The Investment funds balance sheet data: liabilities table
The breakdown of the liabilities on the balance sheet of Investment Funds in Cyprus is reported in 3 categories by the CBC:
1. Loans
2. IF (Investment Funds) shares/units
3. Other liabilities (incl. financial derivatives)

The majority of liabilities is coming from IF shares/units, a consistent theme, with 4,743.1 EUR million outstanding at the end of the period (November 2019) amounting to 83.41% of the total liabilities of Investment Funds in Cyprus. Loans follow with 789 EUR million outstanding (13.88%) and finally, other liabilities (incl. financial derivatives) amount to 154.2 EUR million outstanding (2.71%).

The Investment funds total assets/liabilities, by nature of investment table
The breakdown by nature of investment of the assets/liabilities on the balance sheet of Investment Funds in Cyprus is collected in 5 categories (Figure 2) by the CBC:
1. Equity
2. Bond
3. Mixed
4. Real Estate
5. Other

All categories recorded an increase compared to the end of the previous period (June 2019). The smallest class, Bond, reported the biggest increase at 25.34% and 190.6 EUR million outstanding. This biggest class, Equity, reported the smallest increase in both percentage terms, 0.15%, and outstanding amount terms, 2,189.6 EUR million (increase of only 3.3 EUR million).

Figure 2 – The progress of total assets/liabilities in EUR million (bars), outstanding at end of period broken down by nature of investment.

The Investment funds total assets/liabilities, by type of investment fund table
The type of investment funds is split into Open End and Closed End.

The last time the Closed End type were representing the majority of investment funds in Cyprus was back in 2012. As shown in Figure 3, the Open End type has ever since been the choice of fund managers, recording higher highs, while Closed End has clearly fallen out of favour.

Figure 3 – The progress of the total assets/liabilities in EUR million (bars), outstanding at end of period broken down by type of investment fund.

The Investment funds total assets/liabilities, UCITS/Non-UCITS breakdown table
The final table of the Investment Funds Statistics as reported by CBC shows total assets/liabilities for both, UCITS and Non-UCITS investment funds, growing. The size of total asset/liabilities outstanding shows that the gap between them is consistently widening.

At the end of September 2019, total assets/liabilities for UCITS amounted to 262.5 EUR million outstanding while for Non-UCITS, the total assets/liabilities were reported at 5,423.8 EUR million outstanding.

Conclusion
Cyprus, as an investment funds jurisdiction, is on the right path as the number testify. As with most things, it will take time, however it appears that key stakeholders such as CIFA, the Funds service providers and other organisations pursuing initiatives in this direction are seeing results. As SALVUS, we welcome and anticipate this growth to continue. We remain committed to contribute further.

Upcoming changes such as the Mini-Manager law, further improvements in the AIFM, UCITS, and Partnership Law and the introduction of the law for the Fund Administrators are all expected to positively influence the landscape for investment funds in Cyprus.

The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.

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