Singapore to launch corporate structure for investment funds

The move aims to encourage fund managers to set up operations in Singapore.

A corporate structure for investment funds, Variable Capital Company (VCC), will be launched later in the year as part of Singapore's efforts to rank amongst the world's top fund centres, Ong Ye Kung, education minister and board member of the Monetary Authority of Singapore (MAS) said in his keynote address at the Singapore-Bloomberg Investment Conference.

This structure can be used by both open-end and close-end funds, as well as for both traditional and alternative strategies. This is said to encourage fund managers to co-locate fund domiciliation with fund management activities.

“This will further deepen our fund servicing ecosystem, and create new business opportunities for a wide range of professions such as lawyers, accountants, tax advisors, fund administrators and custodians in Singapore,” Ong said.

Also read: Singapore could lure global wealth with passage of new VCC Bill

The education minister added that the nascent Asian investment landscape is brimming with potential with AUM expected to grow faster than any region and nearly double to about US$30t in 2025.

“Singapore is benefitting from this regional trend. Our investment management sector expanded by 15% year-on-year between 2012 and 2017 to reach total AUM of $3.3t (US$2.4t),” he added.

The launch of the VCC comes on the heels of a simplified regulatory regime for VC fund managers in 2017. Currently, 57 managers are operating under the new regime.

He also mentioned a partnership with Singapore Venture Capital & Private Equity Association and Cambridge Associates to create inaugural performance benchmarks for PE and VC funds focused on Southeast Asia.