2018 Transparency Report

Cyprus as an AIFM hub

Asset Manager from Japan established a Cyprus based AIFM and AIF to invest in Real Estate in Russia & deploy global macro-strategy

The asset management industry is faced with volatile markets whilst the pool of capital to manage is growing. At the same time, it navigates through significant disruption, changes and pressures from all sides.

KPMG member firms combine their depth of local knowledge with global cross-border experience to provide fund managers with the clarity and confidence needed in order to make the right choices to adapt, evolve and transform.

Our client, a Japanese asset manager was seeking a European jurisdiction to establish a management company (AIFM) and an alternative investment fund to accommodate the different envisaged strategies.

He identified investment opportunities in the EMEA region, which fit the return and risk profile of his existing clients. His long-term strategy, however, is to expand his assets under management and in this respect he considers raising capital from Europe.

Cyprus, as a European Union Member State, benefits from the harmonisation of EU financial services regulations and serves as a “bridge” among Europe, the Middle East and Africa not simply by means of its geographical position but also for the high-quality of financial services offered, combined with the flexibility and clarity of its laws and regulations which are continuously updated.

There is a number of recognised fund service providers (depositaries, administrators etc.) established in Cyprus, ranging from global names to local independent operators servicing all types of funds at competitive rates. In addition, Cyprus’ time zone and also tax framework can efficiently serve the fund industry.

The structure which was set up allows the client to spend essential time outside Cyprus, as he can rely on a local team for the day to day operations and administration. Furthermore, the possibility to keep segregated compartments within the same umbrella structure is essential in order to cater for the different strategies.

The structure which was established can be used for all projects related to alternative assets.

An asset manager may as from July 2018 set up under his AIFM, a Registered Alternative Investment Fund which is one of the most flexible investment funds in Europe. It features a quick time to market, access to the EU passport. Further, the AIFMD quality seal ensures a high level of investor protection (appointment of a Depositary bank, regulation of the AIFM, audit etc.).