Singapore’s central bank has outlined the factors it plans to consider when selecting investment managers for a new hedge fund programme designed to encourage managers to establish or expand their operations in the city state, according to a report by Asia Asset Management.
The city state’s financial service regulator, the Monetary Authority of Singapore (MAS), will assess prospective managers partly on their commitment to developing their Singapore-based businesses, including the scale and nature of activities they plan to conduct locally.
Managers’ plans to build investment capabilities in Singapore and their approach to developing local talent will also form part of the assessment process.
MAS will additionally consider managers’ investment strategies and monitor the progress of those appointed against their development commitments. The regulator will review fund performance as part of its assessment of whether the programme is meeting its objectives.
The initiative is intended to attract hedge fund firms to establish a presence in Singapore or expand existing operations, according to Gan Kim Yong, Singapore’s deputy prime minister and chairman of MAS, in a written parliamentary reply on 8 September.
MAS is currently consulting with industry participants and has yet to provide further details of how the programme will operate or the managers that could qualify.
The initiative comes as Singapore’s asset management sector continues to expand. Industry assets have increased at a compound annual growth rate of 7.5% over the past five years, reaching almost SGD7tn ($5.5tn).
Gan said hedge funds form a growing part of the industry and contribute to the depth and diversity of Singapore’s financial sector, including through investment and trading activity involving other financial intermediaries.
The programme’s emphasis on managers’ local activities and talent development indicates that MAS intends to assess prospective participants not solely on investment performance, but also on the extent to which their operations contribute to Singapore’s wider asset management ecosystem.
Further details of the programme will be announced by MAS once its engagement with industry stakeholders has progressed.
