by jiawen
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Among all the other Asia countries, Singapore and Hong Kong are rapidly maturing as Asia’s top hedge fund management centres. To achieve Singapore’s ambition to become the regional fund domiciliation hub, the government’s efforts are aimed at creating a favourable regulatory environment for hedge funds through various financial and business incentives. For instance, in 2020, Singapore launched a new corporate structure called “Variable Capital Company (VCC)” which provides an alternative for fund managers to establish their presence in the city state. VCC structure allows fund managers to improve their operational and tax efficiency through adoption of umbrella structures with multiple sub-funds. Data in the Monetary Authority of Singapore’s (MAS) Asset Management Survey 2021 shows that there are more than 660 VCCs as at 14 October 2022, with nearly 20% of the VCCs are hedge funds.
According to a news article published on The Straits Times, while Hong Kong remains to be the biggest hedge fund hub in Asia with 44% of hedge fund managers operating in the region, Singapore emerges as a safe haven that poses competitive threats to Hong Kong. Highly skilled workforce and political stability have contributed to the economic growth of Singapore and made the country attractive to foreign firms. Some of the biggest hedge fund managers such as Marshall Wace and D.E. Shaw & Co have recently opened an office in the city state. One of the Bloomberg data analysis shows that the most significant growth in the number of hedge funds in Singapore was in the second half of 2019 that was also when Hong Kong experienced political unrest and mass protests.
Conclusion
As Singapore continues to attract fund managers to set up operations locally to capture more investment opportunities, total assets under management (AUM) in Singapore grew 16% year-on-year in 2021 to reach S$5.4 trillion. Nearly one-third of the total AUM come from Asia Pacific countries other than Singapore, according to the Asset Management Survey released by the MAS. This indicates that Singapore is now one of the most attractive spots for firms wanting to set up and operate a business in Asia.
How We Can Help
Alder offers integrated solutions for clients who wish to set up a fund management company in Singapore which include:
- Offer Professional Advice on the Specific Licence Requirements
- Assist with the CMS Licence Application
- Assist with the Registration as an LFMC
- Review the Submission Documents (Form 1A, Form 3A, Form 11, Form 22A whichever applicable)
- Liaise with MAS on Licence Application-related matters
- Provide On-going Compliance Support Post-Licence Approval
Reference Materials
Monetary Authority of Singapore (2022). ‘2021 Singapore Asset Management Survey’. Available at: https://www.mas.gov.sg/-/media/mas/news-and-publications/surveys/asset-management/singapore-asset-management-survey-2021-1.pdf
The Straits Times (2022). ‘Singapore chips away at Hong Kong’s hedge fund dominance’. Available at: https://www.straitstimes.com/business/singapore-chips-away-at-hong-kong-s-hedge-fund-dominance
This update is targeted at Licensed / Exempt Financial Advisers and Insurance Brokers. MAS has introduced updated misconduct reporting requirements that firms should start preparing for ahead of the implementation date of 1 January 2027. The changes affect how firms identify reportable misconduct, when reports must be filed, when follow-up updates are required, and what
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