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Hedge Funds Shifting operations to Malta

10th January, 2012
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A 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.

In January, Clive Capital has opened a Maltese office and manages an estimated $5 billion. 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.

Needless to say, such interest in Malta also means added interest in the real estate sector, so much so that unlike other countries, property prices in Malta have stood still and only saw a marginal average reduction in value. Specific areas and regions have maintained a healthy capital appreciation of up to 5%. The rental market is booming and many are seeking Malta for property investment. Of specific interest are Special Designated Areas, where the government holds no restrictions in terms of who and how many properties a foreign national can purchase (such as Tigne Point, Pendergardens and Fort Cambridge).

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