CIFA President on staying competitive in an evolving investment landscape

Maria Panayiotou, President of the Cyprus Investment Funds Association (CIFA), reveals the Association’s goals for this year and examines the challenges faced by investment fund managers in the current global climate.

What does the Cyprus Investment Funds Association (CIFA) hope to achieve in 2025?

CIFA aims to further solidify Cyprus’ position as a premier jurisdiction for investment funds, fund managers and providers of supporting services. A key goal is to continue the sector’s growth by attracting more fund managers and investments while ensuring that the country remains competitive in the global market. The Association also seeks to modernise regulatory processes, enhance financial literacy and promote sustainable investment strategies. CIFA is committed to working closely with stakeholders, including the Ministry of Finance, the House of Representatives and the Cyprus Securities and Exchange Commission (CySEC) to facilitate the approval of pending legislation to enhance the industry’s regulatory framework and competitiveness.

In 2024, CIFA reported €9.3 billion assets under management in Cyprus. Do you expect this figure to grow in 2025? What are the main areas of investment?

We are optimistic but, with so much global uncertainty, we cannot be sure about anything. What we do know is that the investment funds sector in Cyprus has been maturing and expanding steadily, supported by a robust legal framework and a growing number of fund managers choosing Cyprus as their base. The main investment areas include real estate, shipping, technology, education, healthcare and renewable energy. Additionally, there is increasing interest in ESG-compliant investments, reflecting a global trend toward sustainable and socially responsible investing.

Can you elaborate on the latest regulations affecting investment fund managers?

One of the key regulatory changes is the introduction of AIFMD II, which aims to enhance investor protection, improve market stability and increase transparency in the Alternative Investment Fund (AIF) sector. A major development under this directive is the new framework for the passporting of depositaries, which is a significant development for AIFs and their depositaries. Based on this development, an AIF can appoint a depositary from another EU member state and thus increase cross-border investment opportunities. This is good for competition and efficiency, especially in smaller financial markets. In addition to AIFMD II, another regulation, regarding cybersecurity and operational resilience for financial institutions – including fund managers – became fully applicable onJanuary 17, 2025. CIFA has been advocating for a balanced regulatory approach to ensure that Cyprus remains an attractive jurisdiction while complying with EU requirements.

Are there any challenges in the foreseeable future that need to be tackled by Cyprus in terms of investment?

Cyprus faces several challenges that could impact its attractiveness as an investment hub. These include increased global competition from traditional and new fund jurisdictions, growing regulatory requirements that add compliance costs, and geopolitical instability in the region. Additionally, bureaucratic inefficiencies and the need for a greater adoption of digital solutions in regulatory processes remain serious concerns. CIFA is actively working with stakeholders to address these issues by streamlining administrative procedures and ensuring that Cyprus remains competitive in the evolving investment landscape.

How has CIFA expanded its international collaboration to ensure that Cyprus continues to meet global standards?

CIFA has been actively engaging in international partnerships to promote Cyprus as a competitive jurisdiction for investment funds. The Association collaborates with Invest Cyprus, the regulatory authorities and international organisations such as the European Fund and Asset Management Association (EFAMA). Additionally, we have organised and participated in roadshows and events in major financial centres, including London and Athens, to attract global investors and fund managers. These efforts aim to reinforce Cyprus’ reputation as a reliable and transparent investment destination while ensuring that the regulatory framework aligns with international best practices.

In what ways has the investment sector been affected by new technology?

The rise of financial technology (fintech) has significantly influenced the investment funds sector by enhancing efficiency, transparency and accessibility. Digital platforms are transforming fund management operations, enabling faster transactions and better regulatory reporting. Moreover, Artificial Intelligence (AI) and big data analytics are being integrated into investment strategies to optimise decision-making. Additionally, blockchain technology is being explored for its potential to streamline fund administration and reduce fraud risks. CIFA encourages the prudent adoption of these technological advancements to maintain competitiveness in the global financial sector. In this regard, we are also encouraging and training our members to implement the Regulations on Digital Operational Resilience (DORA) and Markets in Crypto-assets (MiCA).

This interview first appeared in the February edition of GOLD magazine. Click here to view it.