Hedge Fund Operations Move to Malta


CSB Group has recently shared with you the recent report by Jeremy Khan in Bloomberg Markets states that there is an increased wave of hedge-fund executives washing up on Malta’s shores, lured by low taxes, cheap labor and a coveted address inside the European Union.

In fact, as of early November, the number of funds located in Malta had grown to more than 500 with 8 billion euros ($10.7 billion) under management from 165 funds with less than 5 billion euros under management in 2006, according to the Malta Financial Services Authority, or MFSA.

It now also appears that their shift of operations to Malta is happening 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.

As reported by The Times of Malta, 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.

FinanceMalta said that “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 added that Malta enjoys an advantage as a European Union domicile, as it gives managers based here greater flexibility under the terms of recently-enacted rules to regulate the European hedge fund industry. It is significantly cheaper to run an office from the island when compared to London or Geneva.