Created : 14-11-2012 09:17:13 - Business
2012 - Malta classified again as an Attractive Financial Services Jurisdiction
Dr Maria Chetcuti Cauchi
An increasing number of start-up financial firms are setting up in Malta. In a report issued in March of this year, Hedge Week has reported that regulatory incubator Sturgeon Ventures LLP has established three of its fund manager clients in Malta. Seonaid Mackenzie, Managing Partner at Sturgeon Ventures cites ‘Low cost, efficient regulation and access to the European Union’ as ‘the three key attributes that are putting Malta increasingly on the wish-list of financial firms looking for a regulatory jurisdiction’.
Hedge fund Tertius European Absolute Return, which returned 5.42% in Q4 2011, putting it in the 93rd percentile of 1,150 funds in its sector; Clerkenwell Capital, manager of the Clerkenwell Matterhorn Fund, a professional investor fund that invests in listed European real estate securities and Sarum Partners, a private equity fund manager have been guided to Malta by Sturgeon.
Mr Mackenzie, Managing Partner at Sturgeon Ventures described Malta as being ‘a perfect regulatory jurisdiction for start-ups.’ Adrian Elwood, Managing Director of Clerkenwell Capital stated that: “Malta is an onshore European jurisdiction offering a high level of investor protection but is sufficiently cost effective to attract start-up funds.”
Mario Reinisch, Chief Executive Officer of Tertius Capital cited the fact that English is a second language in Malta, Malta’s adoption of the traditions of the UK legal system, its cheap operating costs when compared to jurisdictions such as Luxembourg, Malta’s double taxation treaty network and Malta’s good standing within the EU as key advantages and sources of attraction. Oliver de Giorgio-Miller, a Director and Investment Committee member of Sarum Oncology Fund referred to Malta’s “efficient and flexible regulatory regime for investment funds” and to the positive ranking given in the World Economic Forum Global Competitiveness Report in terms of financial market sophistication, strength of regulation of securities exchanges, soundness of the banking system and reporting and auditing standards as being plus points tilting the balance in Malta’s favour.
Successful stories such as the above, as well as the continuous positive reports by rating agencies such as Moody's Investors Service that in September of this year affirmed Malta's A3 government bond rating, are all indicators that the island and its direction, are on the right track. Moody's slaimed that the key drivers for this positive outcome were the government's successful consolidation strategy, which brought the 2011 fiscal imbalance below the 3% of GDP ceiling under the EU's excessive deficit procedure.
The island has managed to attract small to medium sized fund platforms. The island's next challenge is to get the big fund platforms to choose the island instead of their usual choice of Luxembourg or Ireland. It is being felt that the island, boasting a solid regulatory regime and a firm yet speedy and flexible regulator has become an internationally recognised brand denoting excellence and will catch up very soon in the attraction of bigger players.