OVER VIEW
SINGAPORE: THE ‘GO TO’ DOMICILE FOR ASIA PACIFIC EXPANSION BY KRISTINA WEST
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ingapore continues to make significant efforts to further promote the appeal of the Lion City to hedge funds, private equity and other alternative investment managers, and it seems that its strategy is working. In 2020, Singapore’s asset management industry grew strongly, with assets under management (AuM) rising more than 17 per cent overall and at 31 per cent year-on-year in the alternatives sector. Venture capital and private equity continue to be strong performers within this segment. Singapore provides a key gateway for global investment managers seeking to raise assets and invest across Asia Pacific’s financial markets and with a significant family office presence, Singapore also represents an important fundraising hub for those seeking to expand in the region. A GAME-CHANGING STRUCTURE
Last year, the unveiling of the Variable Capital Companies (VCC) Act was widely seen in the investment industry as a potential game-changer. In addition to facilitating increasingly attractive and efficient structures
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for Asia-centric hedge fund strategies and other regional and global alternative investment strategies, the new investment fund framework is expected to have major employment benefits for Singapore’s financial services sector and beyond. The VCC provides the fund management industry with a new corporate structure tailored for investment funds, offering them greater operational flexibility and cost savings. “Fund managers using the VCC framework benefit from its flexible capital structure, effective segregation of assets and liabilities, and ability to cater to open and close-ended funds,” says Gillian Tan, Assistant Managing Director (Development & International), Monetary Authority of Singapore (MAS). Some fund managers have even redomiciled their existing funds to Singapore, including from Cayman Islands, Bahamas, Mauritius and Cook Islands. “This demonstrates the global appeal of VCC to fund managers who seek to enhance the substance of their activities locally, and to maximise operational efficiencies and cost savings from co-locating their fund
management and fund domiciliation activities in Singapore,” Tan adds. The VCC’s successful launch has been a catalyst for growth, but also shows the need for sustainable digital capabilities and regulatory developments to grow Singapore as a digital asset hub. Martin O’Regan, Managing Director at Solas, says: “The growing sophistication of funds will require directors to demonstrate skills in risk, strategy oversight, compliance and investment processes.” A NEW ASSET MANAGEMENT ECOSYSTEM
While the VCC has been a key development, it is not the only one. To underscore how the island views its position within the global funds industry, its financial regulator, MAS, recently announced a new partnership between it and the private sector to burnish Singapore’s reputation as a leading full-service asset management and fund domiciliation hub. Known as the Singapore Funds Industry Group (SFIG), its mission is to bring together key players across the entire asset
SINGAPORE REPORT | OCTOBER
