Cyprus will be able to rise to the challenges, FinMin says

Cyprus Minister of Finance Constantinos Petrides said on Monday that Cyprus will be able to tackle the new risks and challenges, stemming from the war in Ukraine and soaring inflationary pressures.

He was addressing the 8th International Funds Summit and Expo.

Andreas Yiasemides, President of the Cyprus Investment Funds Association (CIFA) also stated that we are moving from crisis to crisis but stressed that the Cypriot investment funds sector has proven resilient to the crisis.

The Summit which began today in Nicosia attracts more than 500 delegates from all over the world, discussing the latest trends and developments in the sector.

Addressing the Summit, Petrides said “we are going through a fast changing and uncertain future, where we must be acutely aware of the risks and challenges, as well as the opportunities,” adding “I believe that we will rise again to the challenges.”

The Finance Minister noted at the backdrop of the war in Ukraine, the Cypriot economy has proven resilient and flexible, exceeding significantly the growth expectations.

Petrides pointed out that the Funds industry “is essential in the provision of alternative tools for the financing of long – term projects, businesses, and start-ups and the local economy of each member state.”

“As EU economies still rely largely on the banking sector to provide funding for businesses, he said, “market – based finance is a valuable alternative to bank financing, and can facilitate risk sharing across the financial system and support economic activity.”

He also recalled that the government as part of efforts to provide Cypriot innovative SMEs with access to finance has established Cyprus Equity Fund in collaboration with European Investment Fund (EIF) with the government contributing €30 million, while significant private capital participation is expected to increase the size of the fund further.

The fund’s investment strategy will focus on Cypriot start-ups and innovative companies, he said.

Opening the conference Andreas Yiasemides said the funds industry, like all sectors, is once again adapting its business model and modus operandi to the new market conditions.

“Last year we were discussing the speed and strength of the post-pandemic economic recovery, this year we are surrounded by uncertainty, inflation and instability. In other words, we are moving from crisis to crisis,” he said.

But he noted that “despite the difficulties, 2022 evolved into another exciting year for the Fund industry in Cyprus, which is now considered an established sector of the economy having proved its resilience during the COVID-19 period and more recently with the consequences of the war in Ukraine, energy crisis and inflationary pressures.”

“Cyprus is continuously gaining momentum as a centre of excellence for the international fund and asset management industry,” he added.

He highlighted Cyprus investment funds sector “remarkable growth” over the past years, noting that by the end of the first half of 2022, the total assets under management exceeded €11 billion.

Yiasemides also cited the European Funds and Asset Management Association (EFAMA) data according to which during 2021, the net assets of AIFs increased by 61.5%.

“Considering that only Ireland, Luxembourg, and Malta concentrate higher percentages, we believe it is a remarkable achievement for a jurisdiction that started developing the sector less than ten years ago,” he said.

In his remarks, George Theocharides, President of the Cyprus Securities and Exchange Commission said that the Commission has modernised the investment funds legal framework during the last nine years “contributing to the consolidation of the collective investments sector which has quadrupled in size since 2016, with assets under management amounting to €10.6 billion.”

Evgenios Evgeniou, President of Invest Cyprus, spoke of a “tangible and multi-faceted contribution” to the economy which is reflected in investments, job creation and revenue for the state.

Source: Cyprus News Agency