The assets under management among investment firms supervised by the Cyprus Securities and Exchange Commission (CySEC) decreased by 18% to €9.5 billion during the fourth quarter of 2022. This AUM decreased from €11.6 billion during the same period in the prior year.

CySEC disclosed these in its quarterly statistics for the fourth quarter of 2022 released on Thursday, noting that the AUM is a 3.7% drop from the third quarter of 2022’s €9.9 billion. The financial markets regulator explained that the value of investments under management decreased “mainly due to devaluation of assets, redemptions of investment shares and asset disposals.”

“Given the undesirable events and unforeseen circumstances of the last couple of years, the Undertakings of the Collective Investments Sector could not stay unaffected,” CySEC added.

AUM Drops despite Increase in Firms

As of the end of the fourth quarter of 2022, CySEC had 333 management companies and Undertakings of Collective Investments (UCIs) under its supervision. From this number, "243 have operations,” CySEC pointed out.

Finance Magnates reported that the number of investment managers under CySEC increased from 330 to 333 during the third quarter of last year, expanding 12% compared to Q3 2021. As of December 2022, this number remained stable.

Giving a breakdown of the 333 investment managers under its regulation regime, CySEC noted that the majority of them (219) are externally managed UCIs. The others include 40 internally managed UCIs and 74 external fund managers.

Furthermore, the regulator explained that these firms comprise 45 alternative investment fund managers (AIFMs), 59 sub-threshold AIFMs, four Undertakings for Collective Investment in Transferable Securities (UCITS) management firms and six other companies which hold both the AIFM and UCITS licenses.

“The UCIs, managed by the management companies, had a Net Asset Value (NAV) of €8.9 billion. Approximately, 64% of the AUM relate to assets managed by the AIFMs, 10% by the sub-threshold AIFMs, 16% by the AIFMs and UCITS management companies, 9% by the UCITS management companies and only 1% by the regulated UCIs that are managed by foreign fund managers,” CySEC explained.

CySEC Gives Breakdown of Investment

In the quarterly report, CySEC added how investments were scattered across various asset classes and industries. The Cypriot watchdog noted that approximately 84.6% of AUM under management by the UCITS firms were committed to transferable securities while only a tiny 8.7% went to bank deposits. Moreover, these firms invested 5.5% in UCITS and UCIs.

On the other hand, CySEC says it currently regulates a total of 207 UCIs with operations, 80% (or 186) of which are based in Cyprus and comprise 13 UCITS, 56 Alternative Invesment Funds, 52 Alternative Investment Funds with Limited Number of Persons (AIFLNP) and 65 Registered Alternative Invesment Funds (RAIF).

“From the total 207 UCIs, 163 invest in Cyprus partially or entirely and these investments amount to €2.2 billion or 23.4% of the total Assets Under Management. 69.5% of the investments in Cyprus are in private equity, while the 13.1% are in real estate,” the Cypriot watchdog commented.

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