According to Thomson Reuters Lipper, the year 2017 was a record year for the European fund industry, with inflows into mutual funds reaching a new all-time high, in conjunction with a generally positive market environment driving the assets under management to a new all-time high.
It is expected that the European fund industry should be in a good position to maintain its growth in 2018. Further, the asset management industry is globally also witnessing a shift in net flows from traditional mutual funds to alternative products such as specialist products and investment solutions.
Within this favorable climate Cyprus can surely benefit. It offers a European passport of quality combined with the flexibility that comes with being a small jurisdiction. Due to its strategic location it also provides numerous distribution opportunities.
Further, the long awaited reforms as this relate to the enhancement of the current Alternative Investment Funds Law which are expected end of first quarter of 2018, will allow for the establishment of new types of AIFs -namely the Registered AIFs- which will facilitate a cost-efficient and quick fund launch. Finally, new structures to the existing legal forms, such as Limited Partnerships with legal personality will provide clients with a wider spectrum of possibilities. This can only boost the AIFs sector in Cyprus and attract the interest of fund managers and fund promoters.
In general, one can say that Cyprus is positioning itself as an attractive Alternative funds domicile. Indeed, the local AIF framework offers a flexible vehicle for private equity, infrastructure and real estate fund managers offering clear opportunities for structuring through Cyprus.