“Cyprus has gone from zero to over 330 licensed investment entities managing €9 billion in assets in just a decade,” according to Maria Panayiotou, president of the Cyprus Investment Fund Association (CIFA).
Speaking at the 5th Fund and Asset Management Conference in Athens, Panayiotou attributed this growth to “relentless effort and strategic vision.”
She added that “we now have over 330 licensed entities—collective investment management companies and schemes—with most assets under management classified as Alternative Investment Fund Managers (AIFMs),” crediting this to “systematic and hard work, in cooperation with the Supervisory Authority and all stakeholders.”
She noted that Cyprus has established itself as a key centre for AIFs, attracting investors seeking higher-risk, specialised opportunities.
In contrast to UCITS (Undertakings for Collective Investment in Transferable Securities), which focuses on lower-risk securities for the public, AIFs primarily serve institutional and experienced investors.
On a global scale, the investment fund market reached €70 trillion by mid-2024, with Europe managing about 30 per cent, according to the European Funds and Asset Management Association (EFAMA).
In Cyprus, active collective investment institutions have risen from 166 in July 2021 to 257 today, and Panayiotou expects this upward trend will continue as the nation solidifies its reputation in the sector.
Cyprus’ strong legal and tax frameworks, strategic location, and industry expertise make it an appealing base for AIFs.
“Among the advantages are the strategic location, a strong legal and tax framework, and sector expertise, making Cyprus very attractive for international investors,” Panayiotou said.
Currently, Cyprus ranks as Europe’s fourth-largest destination for cross-border investment funds, after Ireland and Luxembourg, highlighting its growing appeal to fund managers and investors alike.
In addition to these broad advantages, Cyprus offers specific benefits for AIFs, including flexibility in fund structure and customisation options.
Managers can set up open or closed-ended funds, manage diverse assets, and establish umbrella structures that consolidate multiple funds under one management.
Registered AIFs in Cyprus also benefit from streamlined regulatory requirements, as they do not require licensure.
Cyprus’ close ties with Greece add another layer of appeal, allowing Cyprus-based funds to invest internationally.
“Cyprus-based funds can invest in other countries, including Greece, leveraging Cyprus’s regulatory advantages,” Panayiotou said.
Moreover, she pointed out that “this structure could be particularly attractive given the long-standing relationship between the two countries.”
While UCITS serves the public with lower-risk, liquid investments, AIFs are tailored for institutional and knowledgeable investors who are prepared for higher risks.
“AIFs usually target institutional and more experienced and well-informed investors, who are willing to take higher risk for their performance,” Panayiotou explained.
She added that UCITS offer “relatively lower risk and better investment protection.”
AIFs provide access to alternative investments, including real estate, renewable energy, and hedge funds, enabling investors to diversify beyond traditional equity and bond markets.
“AIFs are suitable for investors seeking more specialised investments and have a higher risk tolerance, while UCITS are for investors who want safer options,” Panayiotou concluded.
