Singapore Challenging Hong Kong as Asian Financial Hub.

An October 5th, 2023 article in Bloomberg News highlighted the growing role of Singapore as an Asian financial hub competing with Hong Kong in several key financial and wealth management niches.

Wealth overseen by the asset management industry has doubled in just six years, to about $4 trillion, according to central bank figures, and about 80% of that is foreign. BlackRock Inc. is expanding in Singapore, as is the Ontario Teachers’ Pension Plan, which shut down its equity team in Hong Kong this year. Even Swiss banks are getting into the act: UBS Group AG’s offices dominate an entire city block in a prime shopping district, with a staff of 3,000, a private gym and a cappuccino bar. It’s now the firm’s largest operation in Asia….

The rapid rise of money management is by design. In 2020 the government introduced a new kind of legal structure called a variable capital company that provides tax and legal incentives for hedge funds, venture capital and private equity firms to set up in Singapore, similar to programs in such offshore hubs as the Cayman Islands and Luxembourg. More than 600 companies had taken advantage of the new program as of last October…

Some of the world’s largest money managers have staffed up in Singapore, including Marshall Wace, Griffin’s Citadel ­Enterprise Americas and D.E. Shaw. Billionaire Cohen’s Point72 Asset ­Management has expanded its Singapore team more than 50%, to 100 people. Overall, hedge fund assets grew 30% in 2021, to S$257 billion ($191 billion)—making for the biggest dollar increase on record, according to the most recent data from the Monetary Authority of Singapore, the city-state’s central bank…

The number of family offices—firms that manage the lives and wealth of rich clans—climbed to 1,100 at the end of last year, from just 400 in 2020, according to MAS estimates. Among the incentives: tax changes in 2019 and a program that provides a fast track to residency for the ultrawealthy. “Singapore will continue to benefit from wealth and asset flows,” said Piyush Gupta, chief executive officer of DBS Group Holdings Ltd., the country’s biggest bank, in a written response to questions. “Singapore benefits from being a safe haven, having an efficient financial system and being a bridge between East and West….”

“The RIch Are Flocking to Singapore. Bankers Stick With Hong Kong”

Hong Kong still dominates in larger capital market transactions and hedge funds but Singapore is growing as a center for wealth management.

Posted in Capital Markets, Wealth Management.