1. The Investment funds balance sheet data: assets table

The total assets outstanding at the end of March 2022, were reported at 8,692 million EUR. This represents a 0.55% decrease on the 8,740.4 million EUR total assets reported at the end of December 2021. Further, for the first time in almost two years, the Investment Funds total outstanding assets have decreased quarter-over-quarter. Despite the decrease, the Investment Funds total AUM for Q1 in 2022 remains the second-highest AUM value ever. The graph in Figure 1 below portrays the recent decrease but clearly shows just how far the Investment Funds industry in Cyprus has grown within the last decade.

In contrast to the quarter-over-quarter AUM decrease for Q1 in 2022, the total number of reporting entities jumped to 273 from 257. Thus, the increase in reporting entities represents the second largest increase in a single quarter since the Central Bank of Cyprus began publishing the Investment Funds Statistics reports.

Figure 1 below, combines the 2 aforementioned 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 the period and the Number of Reporting Entities (line) from the end of March 2011 until the end of March 2022.

2. The Investment funds balance sheet data: liabilities table

The CBC uses 3 segments to show the liabilities on the balance sheet of the Investment Funds in Cyprus:

1. Loans
2. IF (Investment Funds) shares/units
3. Other liabilities (incl. financial derivatives)

IF shares/units consistently make up the majority of liabilities on the balance sheet of Investment Funds. The IF shares/units amount to 88.94% of the total liabilities of Investment Funds in Cyprus totalling 7,730.4 million EUR; a 0.58% increase quarter-over-quarter. The Loans segment recorded a whopping 20.88% (168.2 million EUR) decrease falling from 805.9 million EUR to 637.6 million EUR in just a single quarter. Finally, other liabilities (incl. financial derivatives) recorded a big increase totalling to 324.0 million EUR from 248.8 that was previously recorded for the end of Q4 in 2021.

3. The Investment funds total assets/liabilities, by nature of investment table

The third section of the Investment Funds Statistics report by the CBC for Cyprus in Q1 of 2022 depicts the breakdown by nature of investment of the total assets/liabilities. In particular, the CBC demonstrates the figures through the following categories:

1. Equity
2. Bond
3. Mixed
4. Real Estate
5. Other

Only the Equity and Mixed categories recorded an increase quarter-over-quarter; the categories of Bond, Real Estate, and Other all recorded losses. Furthermore, the Other category (orange in Fig. 2), continues to maintain its spot as the largest category even though it recorded a 3.58% (124.2 million EUR) decrease from the previous statistics report by the CBC. The Equity category (red in Fig. 2) maintains its position behind Other as the second largest category followed by Mixed (purple in Fig. 2), Real Estate (blue in Fig. 2), and Bond (green in Fig. 2), respectively.

Additionally, it is important to highlight that Bond had the largest percentage decline in total assets/liabilities by nature of investment which equated to a 6.91% drop from the previous quarter.

Figure 2 – The split between the Investment Funds total assets/liabilities by nature of investment as outlined by the Central Bank of Cyprus (CBC) within the Q1 2022 Investment Funds Statistics report.

4. 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.

As shown in Figure 3, Close End (green line) Investment Funds grew for the second consecutive quarter (total increase of 39.8 million EUR equating to 12.09%). On the other hand, Open End (red line) declined for the first time since Q3 of 2020; the 1.05% decrease equated to a total of 88.2 million EUR.

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.

5. 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 UCITS and Non-UCITS investment funds. The current report, with data up to the end of March 2022, has UCITS and Non-UCITS at 471.7 million EUR and 8,220.4 million EUR respectively; both of which saw a decline quarter-over-quarter. The consistent gap between UCITS and Non-UCITS investment funds under CySEC continues to show.

Conclusion

Although the AUM for Investment Funds in Cyprus decreased (from 8,740.4 million EUR in Q4 2021 to 8,692.0 million EUR in Q1 2022 equating to a 0.55% decline) for the time since Q3 of 2020, the number of reporting entities continue to increase. In general, the Central Bank of Cyprus’ Investment Funds Statistics for Q1 2022 are intriguing and we as SALVUS, look forward to positively impacting the sector and helping its healthy development.

Finally, the investment services industry in Cyprus continues to grow via the ongoing support from CySEC (the investment services regulator), the professional association of CIFA, and of course the CBC.

Please contact us if you require help setting up your investment fund in Cyprus or would like additional information about the investment services ecosystem.

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Should you be interested to read about relevant topics on the funds sector, feel free to visit our earlier articles:

• AIFMs, UCITs and the Liquidity stress Tests (LST)
• Is it all gloom and doom for hedge funds returns (YTD)?
• The Reasons AIFM, AIF and RAIF come to Cyprus
• The Cypriot AIF: legal forms, types and requirements
• The Cypriot RAIF: substance, requirements and tax
• Cyprus Investment Funds Statistics – December, 2021
• Cyprus Investment Funds Statistics – September, 2021
• Cyprus Investment Funds Statistics – June, 2021
• Cyprus Investment Funds Statistics – March, 2021
• Cyprus Investment Funds Statistics – December, 2020
• Cyprus Investment Funds Statistics – November, 2020
• Cyprus Investment Funds Statistics – August, 2020
• Cyprus Investment Funds Statistics – May, 2020
• Cyprus Investment Funds Statistics – February, 2020

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