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Singapore has announced breaks and other policy changes designed to increase its appeal to hedge fund managers, as competition with Hong Kong intensifies.
The new measures include a new hedge fund investment programme to anchor leading hedge fund managers in Singapore, alongside broader tax exemptions for profit-related returns from the provision of fund management services to qualifying funds;
The hub is also planning an investment management pathway within its Overseas Networks & Expertise (ONE) Pass framework “to attract top global leaders and senior investment professionals in asset management,” according to a statement from the Monetary Authority of Singapore.
“As a package, the three measures aim to incentivise key asset managers to anchor their business activities, capital allocation and talent deployment in Singapore.”
It comes amid a boom in the region’s hedge fund industry, with firms expanding in the the region’s two leading hubs, Hong Kong and Singapore, and increased activity in Australia, Japan and other secondary hubs.
Reversal of the position
Singapore’s new plans follow a letter from AIMA about the urgency of the threat facing Singapore’s industry position. “The competitive pressure is no longer theoretical,” said the trade group.
“To illustrate, a leading global manager has shared with us, on an anonymised basis, that its Singapore headcount has declined over recent years while its Hong Kong presence has grown many multiples over the same period – a reversal of the position of only a few years ago, when Singapore was its regional centre of gravity.”
AIMA added that several global managers indicated that Singapore is increasingly excluded from consideration for new regional setups; and one multi-billion dollar and long-established manager based in Singapore reported portfolio managers actively fielding relocation interest.
Hong Kong is home to 20 members of the AFI 500 in terms of HQ, with a further three in mainland China, compared to 13 from Singapore. But the latter is home to Dymon Asia Capital, the biggest multi-strategy firm in the region with $9bn under management.
Hong Kong is much larger on aggregate hedge regulated AUM ($234.5bn compared to $80.1bn in Singapore) though this is heavily distorted by OQ Funds Management, which alone represents 55.5% of Hong Kong’s total.
Excluding each centre’s largest manager, the comparison becomes $104.5bn Hong Kong versus $58.0bn Singapore.
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