2023 CIFA Investment Funds Guide

30 CYPRUS INVESTMENT FUNDS 2023-24
Master-Feeder Funds
The Master-Feeder structure allows the
creation of a structure investing its portfolio
into another UCITS, even if located in
another EU country. Streamlining the
efficiency of the fragmented European
industry of investment funds and the
search for economies of scale are the
driving rationale for the introduction of this
investment rule. In a Master-Feeder structure,
investor contributions go into a Feeder fund,
which invests at least 85% of its assets in
the Master Fund and the remaining 15% may
be invested in other assets subject to the
investment objectives of the Feeder Fund.
Umbrella Funds
Umbrella Funds are established with several
investment compartments, commonly
called sub-funds, with each one constituting
a separate pool of segregated assets not
subject to ‘cross-class liability’. The UCITS
fund constitutes a single entity and each
sub-fund has its own separate Net Asset
Value (NAV) calculation and issues units
corresponding to its assets. Rights of the
unitholders of a specific sub-fund only
arise from the assets of that compartment
and each compartment is liable for the
obligations arising from its constitution,
operation or dissolution. A compartment
of an umbrella fund may invest in another
compartment (target) of the same umbrella
fund subject to certain restrictions.
Each investment compartment may be
dissolved or liquidated separately without
affecting the operations of the others.
Foreign UCITS
All foreign UCITS, which qualify under the
relevant EU directive, based in another
EU member state seeking to market their
shares in Cyprus must follow a simple
regulator-to-regulator notification process.