According to the quarterly statistics bulletin released by the Cyprus Securities and Exchange Commission (CySEC), Cyprus' Collective Investments sector for the second quarter of 2023 showcased several notable trends.

CySEC Supervision Overview: Management Companies and UCIs

During this period, CySEC supervised 334 Management Companies and Undertakings of Collective Investments (UCIs). This number represented a slight decrease of 0.30% from Q1 2023 when there were 335 entities. However, compared to the same period in the previous year, this indicated an increase of 1.2%, highlighting the sector's gradual growth.

The 334 entities consisted of 224 Externally Managed UCIs, 37 Internally Managed UCIs, and 73 External Fund Managers. Within the category of Management Companies, there were 47 Alternative Investment Fund Managers (AIFMs), 54 Sub-threshold AIFMs, 3 UCITS Management Companies, and 6 dual license entities. Those served as both AIFMs and UCITS Management Companies.

For Q2 2023, the Total Assets Under Management (AUM) in the Collective Investments sector exceeded €10.7 billion. This reflected an uptick of 0.42% compared to Q1 2023 and an improvement of 0.87% when compared to the same period in 2022.

The distribution of AUM across various entities showcased that 67% of the AUM were managed by AIFMs, 14% by AIFMs and UCITS Management Companies, 10% by Sub-threshold AIFMs, 8% by UCITS Management Companies, and 1% by Regulated UCIs managed by Foreign Fund Managers.

Real Estate and Private Equity: Key Sectors for Investment

When it came to investment categories, approximately 89.2% of UCITS Assets under Management were invested in Transferable Securities, with 5.5% in UCITSs and UCIs and 4.2% in bank deposits. For AIFs, AIFLNPs, and RAIFs, investments in Private Equity constituted 48.3% of the AUM, while Hedge Funds represented 9.8%. Investments in Real Estate accounted for 9.3% of AUM, and Investments in Funds of Funds constituted 9.1%.

Out of 217 UCIs with operations, 81% of the total AUM was held by 197 UCIs domiciled in Cyprus. This included 13 UCITS, 55 AIFs, 51 AIFLNPs, and 78 RAIFs. From this total, 162 UCIs had partial or full investments in Cyprus, amounting to €2.8 billion or 26.7% of the total AUM. Within this group, 73.6% of investments in Cyprus were in Private Equity, while 11.1% were allocated to Real Estate.

Unitholder categorization revealed that the majority of UCITS investors, 98.9%, were retail investors. For AIFs, AIFNLPs, and RAIFs, 68.1% were well-informed investors, 18.8% were professional investors, and 13.1% were retail investors.

Q2 2023 also witnessed specific sector investments, with AUM in the Energy sector amounting to €456.2 million, representing 4.248% of the total AUM. Fintech investments stood at €108.4 million (1.009% of AUM), while Shipping accounted for €555.2 million (5.169% of AUM). Sustainable Investments totaled €71.9 million (0.669% of AUM).

CySEC's comprehensive report provides valuable insight into the state of Cyprus' Collective Investments sector for Q2 2023, reflecting its growth, asset distribution, and investor characteristics.