‘Innovation and trust are key to Malta’s financial services resilience’

Malta’s financial services sector continues to face scrutiny, even on a local level. However, Christian Manicaro, Managing Director of AQA Capital is convinced of the jurisdiction’s resilience. “Malta has made significant strides to improve transparency and restore international confidence and our clients have recognised it as well.”

AQA Capital, headquartered in Malta, commenced operations in 2018 as a UCITS Manager and AIFM licensed by the MFSA, managing funds across the EU for all investor types and asset classes.

Through FinanceMalta’s initiatives, the company managed to amplify its presence and connection with stakeholders. Today, AQA Capital has expanded its presence with offices in Milan, London, and Prague.

“We are a relatively young company and therefore, we became a member of FinanceMalta fairly recently, in 2023. But since then, we have experienced strong and productive levels of collaboration,” explains Dr Manicaro.

“Alongside all our stakeholders, we share the vision of positioning Malta as a premier financial hub. I think that being part of this ecosystem is important because it leads to stronger industry collaboration which fosters a more efficient, pro-business approach. And when engagement delivers quick solutions, this continues to help in everyone’s efforts to create a more dynamic financial ecosystem,” he added.

Dr Manicaro acknowledged the complexity and operational challenges being posed across Europe by increasingly complex financial regulations and that the fund management sector is no exception to these challenges.

“Currently, market volatility, regulatory complexity, growing demands for ESG compliance and tech-driven solutions are the main challenges to the asset management industry but we have embraced AI and automation to offer bespoke financial solutions through innovative financial engineering,” explains Dr Manicaro.

“But it’s this balance between innovation and personal engagement that supports our work and efforts to offer a client-centric service.”

He continued to explain how stricter ESG regulations, transparency obligations, cross-border distribution, and certain areas that remain unharmonized continue to add layers of responsibility and complexity.

“These developments are crucial for investor protection but they also increase operational burdens, and some might even argue we’ve reached a point of over-regulation. Thankfully, the open dialogue being facilitated between industry players and the MFSA should continue to help find sustainable solutions to these challenges.”

Notwithstanding the strengthened trust that Malta’s financial services enjoy, the sector continues to face scrutiny, even locally. However, Dr Manicaro is convinced of the jurisdiction’s resilience.

“Malta has made significant strides in strengthening its reputation by improving transparency and restoring international confidence. Today, our clients recognize the jurisdiction’s stability and business-friendly environment supported by a robust regulatory framework and the MFSA’s open-door policy continues to facilitate swift communication between industry players and the regulator, which is essential for a well-functioning financial ecosystem.”

“Everyone in the industry needs to continue pulling the same rope. At AQA Capital, we believe that trust and transparency are paramount because we believe that only upholding the highest standards of governance reinforces Malta’s reputation as a credible and competitive financial centre.”

Dr Manicaro discussed the growing interest in sustainable investments.

“ESG investing is a global trend, though not yet the most dominant demand among our clients. However, we are fully prepared to meet evolving investor preferences, offering compliant and impactful solutions.”

“We have recognized ESG’s growing role and remain operationally ready to integrate sustainable investment strategies when requested. This acknowledgement is also reflected in our ongoing sponsorship of initiatives such as Wave of Change because we want to remain committed to sustainability even outside of our day-to-day business,” he added.

Dr Manicaro referred to the increasing interest in alternative investments such as private equity, real estate, and hedge funds.

“Alternative investments have become more attractive, although we have also seen significant movement in the retail UCITS space. At AQA, we have expanded our operations in private equity, real estate, and hedge funds and continued to focus on our dedicated investment committees for these asset classes.”

“Recently, we have also pioneered several interesting PE and RE fund projects, and the sector remains a key growth area for us.”

Dr Manicaro refers to the geopolitical instability, inflationary pressures and changing monetary policies being experienced by global markets.

“Periods of instability are a natural and expected part of the investment cycle, so we take a proactive and adaptive approach to risk management to ensure diversified portfolios and resilient asset classes, and we mitigate volatility by using sophisticated financial strategies. Stability, long-term growth, and capital preservation remain at the core of our investment strategy.”

But with advancements in digital investment platforms, AI, blockchain, and big data, AQA Capital acknowledges the need to remain at the forefront of technological adaptation.

“Innovation is inevitable but we have embraced it by applying AI and automation to enhance efficiency and risk management. However, nothing replaces face-to-face interactions when one needs to build trust and even though we have embraced robust digital tools to improve operations, we never compromise on the human element and the quality of client relationships.”

Looking ahead, Manicaro remains optimistic about AQA Capital’s future.

“Besides the pressing challenge across the board related to talent acquisition, our industry will continue to face challenges like market volatility, regulatory complexity, more compliance in terms of ESG and increasingly technology-driven solutions.”

“I believe that opportunity lies in innovation, client-centricity, and adaptability and these are the key pillars in AQA’s strategy which helped the company establish itself as a leading point of reference in the fund industry.”

“Ultimately, the way forward lies in delivering high-quality services, providing tailored solutions, and upholding rigorous compliance, governance, and trust. Anyone in our sector who strives for growth and expansion must stay true to these core values,” concluded Christian Manicaro.

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