by jiawen
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About Hedge Funds
Hedge funds focus on pooling money primarily from accredited investors and investing it in public financial securities such as stocks, fixed income assets, commodities and so on. There are various strategies that hedge fund managers will employ to generate better returns for their investors and reduce their risk exposure. This includes long/short equity, event-driven and market arbitrage to name a few. The fund managers will invest in different securities and equities that match the said strategy in order to maximise the returns despite market fluctuations.
Read More: How to start a hedge fund in Singapore
About Private Equity
On the other hand, private equity (PE) firms tend to focus more on leveraged buyout transactions (LBOs). A leveraged buyout refers to the acquisition of an existing company by a PE firm using a relatively large portion of outside debt financing while the balance is funded with their own equity. The PE firm will then make operational improvements to the company and help to improve its financial health by paying off as much debt as possible using company’s cash flows. When the company’s valuation is getting higher and the timing is right, the PE firm will exit the investment through initial public offerings (IPOs) or sell the portfolio company to interested party. The exit of investment often takes place between three to seven years after the initial investment.
About Venture Capital
A venture capital is a form of private equity that investors provide to fund the startup companies in their early stage with long-term growth potential. They will receive a minority equity (50% or less) in return. In addition, venture capital investors will help entrepreneurs to build their businesses from the ground up based on their strong knowledge of the financial markets and diversified social circles. In the decision-making process, venture capitalists will first assess the company based on their growth potential, management team and the competitive advantage of the product or service. It is a high-risk high-reward industry and the venture capitalists who are risk takers shall expect the returns to come 7 to 10 years later.
On 25 September 2025, the Monetary Authority of Singapore (MAS) issued the Guidelines on Standards of Conduct for Digital Advertising Activities. These new rules, effective 25 March 2026, apply to all financial institutions (FIs) and their appointed digital marketers — including agencies, affiliates, and influencers (“finfluencers”).
As the economy of Singapore grows dynamically, investors are attracted to explore the opportunities and invest their money here. As a result, we can expect the hedge fund industry to perform well in the country. Singapore is competing alongside with Hong Kong, to become the top location that connects fund managers with asset owners who are looking for companies to assist with portfolio management.
In accordance with the Securities and Futures Act (SFA), fund management companies in Singapore need to register themselves with MAS. Otherwise, the company should at least hold a Capital Markets Service Licence to continue operations.
Collective Investment Schemes (CIS) allow investors to pool funds into a managed portfolio of assets such as equities, bonds, or cash. Administered under the Monetary Authority of Singapore (MAS), all CIS offers must comply with the Securities and Futures Act (SFA) and the Code on Collective Investment Schemes.
