Asia’s Race to Attract Investors Intensifies in 2020
Hedge funds and institutional investors looking to Asia may expect intense competition for their business in the coming years.
Singapore is a prime example. Already the leading financial hub in the region, the nation has decided to relax regulations for the financial services industry in an effort to cement its position as the region’s primary wealth and investment management hub.
Earlier this year, the city-state launched a new structure hedge funds and money managers can use to deploy funds and conduct business in the country. Known as the Variable Capital Company, this new structure is more tax-efficient and convenient for investors looking to establish a family office, hedge fund, fund of funds or private equity firm in the country. To sweeten the deal further, Singapore’s government has offered to cover 70% of the costs of setting up an investment firm to help lure capital to the nation.
Singapore’s renewed focus on the investment industry has been catalyzed by growing tensions of its closest rival, Hong Kong. A new security law passed by the Chinese government this month tightens Beijing’s grip on the island and could spark more protests and tensions in the near-future. Investors worried about the political and economic situation in Hong Kong could see Singapore as a viable alternative.
Singapore isn’t alone in its quest for foriegn capital. Japan has also launched enhanced efforts to attract similar money management firms from all over the world. Tokyo is expected to offer free office space, visa waivers and fast-tracking of licences for bankers and asset managers looking to deploy capital in Asia.
However, hedge funds and institutional investors are looking for more than just low taxes and regulatory convenience, they’re also seeking opportunities. KKR, for example, has struck a number of deals in relatively less investor-friendly regions such as India, South Korea and Vietnam.