Hedge funds shifting operations to Malta


Properties on the Sliema PromenadeA number of hedge fund managers are shifting their operations to Malta in response to both the rising costs of business and the growing regulatory burden in their domicile, according to FinanceMalta, the public-private partnership set up to promote Malta’s financial services sector.

Clive Capital has opened a Maltese office and manages an estimated $5 billion across all its international operations. Vector Commodity Management, a fund launched in 2010 by ex-Goldman Sachs senior oil trader Gilbert Saiz, has also opened an office in Malta, and other managers including the $2.3 billion Duet Asset Management, $1billion Finisterre Capital and Belay Partners have all recently opened offices in Malta.

One of the world’s biggest energy hedge funds, BlueGold Capital, domiciled its parent company in Malta in 2008.

“Malta is emerging alongside London, Geneva, Luxembourg and Zug, as another European location for fund managers keen to maintain flexible operating arrangements and reduce tax bills. Solid regulatory procedures ensure Malta is well placed to build its reputation further in the financial services industry,” FinanceMalta said.

In recent years, Malta has continued to strengthen its position as a reputable international financial services centre with financial services contributing about 12 per cent to the country’s GDP.

“Malta enjoys an advantage as a European Union domicile, giving managers based here greater flexibility under the terms of recently-enacted rules to regulate the European hedge fund industry. Running an office from the island is also significantly cheaper than in London or Geneva, as is the cost of living for employees,” FinanceMalta said.

Joseph Bannister, chairman of the MFSA, although pleased with the inflow, said: “We insist on substance. We will be flexible, particularly with the smaller start-ups but they need to show us how they are going to introduce substance into the operation. As long as we see a good plan for development, there is no problem.”

FinanceMalta said it is encouraged by the influx of re-domiciled companies and expects start-up funds to continue to see Malta as the best option compared to Ireland, Luxembourg and even London.

“Certainly the costs of operating in Malta remain substantially below those of other European centres, but more importantly, Malta’s financial centre has developed a good reputation for its willingness to talk with the industry and find workable regulation to ensure a flow of new applicants,” it said.

 

Source: The Times of Malta words by Anthony Manduca

 

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