Singapore must re-invent to stay ahead as a fund financial centre

PwC launching White Paper on Singapore Investment Fund Framework to address needs faced by asset management industry to up its game

SINGAPORE- Viewed globally by industry players, investors and regulators as a pre-eminent asset management centre, Singapore has been the favoured entry point to Asia for Western investment fund houses because of its connectivity to the broader Asian community, robust regulatory framework and business-minded government and infrastructure. However, the ever-changing global environment is putting increasing pressure on financial centres such as Singapore to re-invent itself to remain at the forefront of the industry.

In response to this need, PwC Singapore is launching a White Paper on Singapore Investment Fund Framework that discusses the asset management industry’s need for varying investment structures, vehicles and flexible frameworks to cater for different investment strategies and investor preferences, and proposes a sustainable investment fund framework that will allow different segments of the asset management industry to have a broader spectrum of choice.

Said Justin Ong, Asset Management Leader, PwC Singapore:

“One key observation that can be made is that Singapore currently does not have an investment fund platform which caters to the specific needs of hedge funds, private equity, securitsation or cross border investment funds. To compete or even be on par with global investment centres such as Luxembourg, Dublin, and Cayman Islands, Singapore must be able to offer a variety of investment fund platforms beyond the current structures – such as open-ended companies, segregated portfolio companies, and even segregated sub-funds.

Such a framework would not only help dispense with the limitations of the current regime, it could also lead to an increase in the number of funds set up and managed in Singapore, thereby contributing to the economy.”

One of the main drivers of growth globally will be economic shifts from the developed markets in the West to the emerging markets in the East.

Antony Eldridge, Singapore Financial Services Leader, PwC Singapore commented:

“Recent studies are showing that up to two-thirds of the global economy will be made up of emerging markets by 2050. The rapid urbanisation of Asia coupled with stalling population growth in the West are fuelling this shift and increasing interest in Asia."

There has, in recent years, also been increasing interest by global and regional asset managers in setting up Singapore-domiciled investment vehicles. This is mainly driven by the fact that Singapore is a location where substantive fund management activities and investment vehicles can co-exist. Singapore has a large network of tax treaties that also provides an additional draw. In addition, Singapore’s pro-business environment, world class infrastructure, highly regarded reputation as a regulator, and wide availability of securities service providers and professional services firms all make her an unparalleled location where fund managers, investment banks and capital introducers can mingle.

Added Justin Ong, Asset Management Leader, PwC Singapore,

“As discussions around an Asian cross-border investment fund recognition regime start to take place, Singapore should ensure that it has the bandwidth to allow alternative investment structures to fit both regulator and investor preferences, so that it stands a good chance of becoming the preferred centre to domicile and launch funds for Asian distribution. If Singapore can bring about the necessary changes, it will have a competitive advantage in being first off the ground in introducing more options and flexibility to meet the diverse needs of tomorrow’s investors and fund managers.”

Source: PWC 11th november 2013

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Singapore must re-invent to stay ahead as a fund financial centre

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