Asset managers flock to Singapore’s new corporate structure, cbank says

People walk past the skyline of the Marina Bay central business district in Singapore on April 26, 2013. REUTERS / Edgar Su

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SINGAPORE, Nov. 10 (Reuters) – Singapore’s central bank said on Wednesday that more than 400 open-ended companies (VCCs) had been created or re-domiciled in the city-state in less than two years since the launch of the new corporate structure to consolidate its position as a financial hub.

The framework gives fund managers more flexibility in issuing shares and paying dividends, and allows them to set up multiple funds in a single VCC to reduce costs.

CCVs can be used to set up a corporate structure for a stand-alone fund or for an umbrella fund with multiple compartments. They can be used for traditional and alternative investment funds. Hong Kong also offers a similar structure.

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Around 300 Singapore-based global and regional asset managers had incorporated or re-domiciled more than 400 of these companies by mid-October, the Monetary Authority of Singapore (MAS) said in a survey of asset management. .

The new fund vehicle was launched with 20 CCV in January 2020. Singapore is also providing a grant to encourage more of these funds to locate in the country.

MAS is exploring possible improvements to the framework, including facilitating the conversion of existing investment fund structures and allowing a wider range of entities to set up and manage a VCC, she said in the statement. investigation.

Assets under management in Singapore increased 17% in 2020 to S $ 4.7 trillion ($ 3.5 trillion) from a year ago, driven by net inflows and valuation gains , according to the central bank’s survey.

The VCC structure has proven popular with a wide range of asset managers, including family offices, hedge funds and private equity. Singapore’s appeal has also grown amid political uncertainty in rival Hong Kong’s hub.

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Reporting by Aradhana Aravindan in Singapore; Editing by Sanjeev Miglani

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