Variable Capital Companies in Singapore spark major changes in the global fund management industry


Saturday, February 9, 2019 | By Wout Kalis

Variable Capital Companies in Singapore spark major changes in the global fund management industry

Singapore’s role on the world financial stage got considerably brighter last fall when the city-state’s parliament passed a bill authorizing the creation of Variable Capital Companies (VCCs). The legislation is a game changer for the fund management industry not only in Singapore, but across the globe.

Since VCCs provide countless operations efficiencies and tax advantages, this is a big deal for Singapore. More managers will now incorporate and operate investment funds there, positioning Singapore as a major competitor with the fund domicile jurisdictions currently favored by the industry (the Cayman Islands, Luxembourg, and Dublin).

As the newest member of this exclusive club, and the first in Asia, Singapore and the VCC concept are certain to spark the interest of European and North American fund managers. As an added incentive, the Monetary Authority of Singapore (MAS) has allocated a US$5 billion fund to private market investments. To get a piece of the pie, a fund manager must demonstrate a genuine commitment to either deepening or establishing a significant presence in the Singapore market.

Singapore has long been known as a major center for fund management in Asia. Fund assets managed in Singapore reportedly grew at 15% annually since 2012, reaching $3.3 trillion in Singapore dollars (US$2.4 trillion) by the end of 2017.[1] Much of that money, however, was domiciled outside of Singapore. The VCC law, along with the $5 billion sweetener from the MAS, is likely to reverse that trend, with both homegrown and foreign funds choosing to domicile in Singapore.

Want to take advantage of the new structure but unfamiliar with the territory? To learn more about VCCs and how SS&C GlobeOp can help you succeed in this new market, read our whitepaper, Understanding Singapore’s Variable Capital Companies.  

 

[1] Monetary Authority of Singapore, October 1, 2018



APAC, Asset Management, Fund Administration