Singapore’s asset management push faces an execution test

Singapore’s latest measures may sharpen its position as an Asian asset management hub, but managers still face uncertainty over how and when the proposals will work in practice.

“The most pressing bottleneck is the gap between the announcement and the detailed implementation rules, which are not expected until Budget 2027,” said Barbara Voskamp, partner at DLA Piper. “Managers need clarity as soon as possible.”

The measures build on Singapore’s existing fund-tax framework, including Sections 13D, 13O, 13OA, 13U and 13V. Voskamp said using an established structure should provide some certainty to general partners and limited partners.

“Good policy signalling gets attention, but clear and predictable rules determine where firms invest,” said Raihan Zulimran, managing director of FGS Global.

Voskamp added speed and workable guidance would be more valuable than a lengthy implementation process.

The immediate challenge is whether managers can understand and use them without prolonged uncertainty.

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THE FRICTION AFTER LAUNCH

Once the rules are finalised, managers must still navigate the practical process of establishing and expanding a business in Singapore.

“The next challenge is operational friction,” Zulimran said. “A manager needs to open accounts, secure financing, access prime brokerage, and launch without long delays.”

Licensing is another potential constraint. “Another point is the granting of capital markets services (CMS) licences to fund management companies, which has become really selective, and the process is taking somewhat longer than expected,” Voskamp said.

For global managers, those issues extend across the life of a fund rather than ending when it is launched.

“One area that could further enhance Singapore’s competitiveness is continuing to provide greater certainty and efficiency across the entire fund lifecycle, from launch and distribution to eventual restructuring or closure,” said Jacqueline Pang, head of strategy for Asia Pacific at State Street Investment Management.

“For global managers, predictable regulatory and operational processes can be as important as the incentives to establish products in the market,” she added.

The range of investments eligible for Singapore’s fund-tax incentives could also influence where particular strategies are based.

Voskamp said MAS has clarified that tokenised interests in designated investments should qualify as designated investments themselves. Some assets, including cryptocurrencies, remain outside the current list, although other asset-management hubs offer exemptions covering them.

“This could attract funds with strategies covering these assets to other jurisdictions,” she said.

Immigration is another practical consideration for firms moving investment professionals into Singapore.

“Beyond the tax exemption itself, the immigration and work-pass framework remains a practical constraint for foreign professionals who want to relocate to Singapore,” Voskamp said. “Hence, the ONE Pass Investment Management Track is a really welcome initiative, and we are waiting to see the final details.”

BUILDING THE BENCH

Even if regulatory and operational processes improve, Singapore must expand the pool of professionals available to support incoming managers.

“The key bottleneck is talent depth,” said James Leong, chief executive officer of Grasshopper. “Singapore's talent pool remains relatively shallow across industry roles, partly a function of the sheer number of family offices that have set up here in recent years.”

According to Leong, this goes beyond the portfolio management and investment roles and into key areas like technology, risk and compliance.

Zulimran said that Singapore also needs to build the bench below the senior rainmaker level. A durable hub needs locally developed investment, risk, operations and technology talent.

Competition for that talent is likely to intensify. “We expect this to bring Singapore closer to parity with Hong Kong, with a relative improvement in its attractiveness as an Asian base,” Leong said. “Hong Kong retains the advantage of proximity to the Chinese market, but Singapore offers strong access to Southeast Asia and a natural entry point into India.”

“The net effect, though, is likely to be intensified competition for talent between the two hubs.”

DIFFERENT HUBS, DIFFERENT STRENGTHS

Tax is only one factor determining where global managers establish their Asian operations.

“Singapore’s proposition was never tax alone,” Zulimran said. “It offers regulatory credibility, stability, and a neutral base for deploying capital across Asia, against Hong Kong's mainland connectivity.”

Pang said location decisions continue to depend on client opportunities, talent, regulation, capital-markets connectivity and individual business objectives.

“In practice, many global managers like State Street Investment Management continue to view Singapore and Hong Kong as complementary hubs serving different strategic purposes,” she said.

The measures may therefore strengthen Singapore’s position without producing a wholesale shift from one centre to another. “The ambition should be simple,” Zulimran said. “Singapore should become the easiest place in Asia to launch, trade and scale a global investment platform.”