According to a report published by the Cyprus Securities and Exchange Commission (CySEC) earlier this month, total assets under management in the Cyprus fund industry stood at €11.2 billion in Q4 2025, down 1.97% quarter-on-quarter. Despite this modest contraction, the composition of the market points to the continued dominance of alternative investment structures and a clear preference for private market assets. Alternative investment fund managers now oversee more than 60% of total assets under management, while the sector is increasingly shaped by AIFs, AIFLNPs and RAIFs, alongside the continuing presence of traditional retail fund products.
Within alternative funds, private equity remains the leading asset class, accounting for almost one-third of assets. Real estate is also a major allocation, while funds of funds and hedge funds represent significant portions of portfolios. Within private equity, multi-strategy and growth capital account for the majority of allocations, venture capital represents a smaller but still meaningful share, and mezzanine financing remains almost negligible.
The fund sector is also becoming increasingly aligned with the domestic economy. More than €2.9 billion has been deployed in Cyprus, representing approximately one-quarter of total assets under management. These local investments are concentrated primarily in private equity, with real estate remaining a distant second.
The continued development of the investment funds industry remains central to Cyprus’ role as a financial services hub in the wider region. As the sector grows and diversifies beyond traditional asset classes, governance, regulatory compliance, fund administration controls, and financial reporting capabilities must evolve accordingly. The dominance of private equity, together with its significant share of both alternative fund assets and local investments in Cyprus, further increases the importance of financial advisory support. Valuation, due diligence, financial modelling, transaction support, and independent analysis are particularly relevant in a market where private equity strategies require careful assessment of underlying businesses, growth prospects, and exit opportunities. At the same time, risk management remains essential for assessing fund exposures, operational resilience, counterparty risk, and governance frameworks. Together, these developments reinforce the need for reliable professional services across reporting and compliance, data integrity and security, audit readiness, risk management, and broader advisory support for organisations operating within Cyprus’ financial services ecosystem.
Baker Tilly is well placed to support organisations in this environment, bringing reputable financial advisory and risk management capabilities to the fund sector and related investment activity. With broad-based experience across the financial services landscape and a deep understanding of the commercial, operational, and regulatory considerations shaping the market, Baker Tilly can assist fund managers, investors, and portfolio companies in responding to the evolving demands of Cyprus’ financial services market.
