Singapore should anchor hedge fund leaders, nurture local managers amid regional talent war: observers

[SINGAPORE] As tax advantages narrow across competing financial hubs, Singapore’s true competitive edge will depend on more than drawing capital – it will need to anchor the decision-makers who manage and allocate it, said hedge funds and industry watchers.

Attracting senior investment professionals could create a multiplier effect, bringing investment teams and demand for functions spanning research, technology, risk management, legal and compliance, they added.

That could help turn higher assets under management into greater-value jobs and deeper expertise on the ground.

“One misconception is that talent automatically follows incentives. In practice, we often see the opposite dynamic,” said Neil Synnott, regional chief commercial officer for Asia-Pacific at IQ-EQ.

“The real competition is not for capital on paper, but for the people and decision-making functions that create long-term economic value.”

On Wednesday (Aug 19), the Monetary Authority of Singapore announced that it is looking to add a slew of new measures to boost Singapore’s competitiveness as an asset-management hub.

These comprise a new tax-exemption scheme, a hedge fund investment programme and a work-pass track to attract foreign talent.

Synnott pointed out that the question is no longer where assets are booked, but instead where firms choose to locate leadership teams, investment committees and key decision-makers.

Firms tend to gravitate towards locations where talent, expertise and supporting infrastructure are already concentrated, he added.

Reed Smith partner Etelka Bogardi drew a distinction between what drives an individual portfolio manager and what matters to the firm.

“An individual portfolio manager weighs take-home pay on performance income and lifestyle, while the firm weighs access to capital, proximity to deal flow, regulatory quality and depth of the talent bench,” she said.

Firm-level considerations are far stickier, which is why managers rarely relocate simply in response to a single incentive.

“What actually moves is the marginal decision on where the next senior hire sits, and where risk capital is allocated,” said Bogardi.

Maira Jamall, senior consultant of banking and financial services at Robert Walters Singapore, noted that the ability to attract and retain senior investment professionals in the hedge fund space also creates a “multiplier effect” to spur hiring.

James Ong, group head of asset management at CGS International Securities, said that firms deciding where to expand also weigh access to investors, the availability of local talent, and the strength of the operating environment, which includes service providers and clear licensing timelines.

Building the wider talent ecosystem

Hedge funds based in Singapore said anchoring senior investment professionals could also lead to growth across the broader fund-management ecosystem.

Kenneth Kan, Dymon Asia Capital’s deputy chief executive officer and managing partner, pointed out that when fund managers deepen their presence in Singapore, they build “more than investment teams”.

“They also invest in research, technology, risk management, legal, compliance, finance, human resources and operations,” he said.

“These are high-value roles that create opportunities for Singaporeans and strengthen the broader financial ecosystem.”

Wong Kok Hoi, founder, executive chairman and chief strategist of APS Asset Management, noted that there are two critical drivers of any hedge fund business: assets and talent.

Both are highly mobile – assets can move with one electronic instruction, while talent can move in months, he said.

A large multi-asset hedge fund manager, who spoke on the condition of anonymity, described the new measures as “unequivocally very positive” for the flourishing fund management industry in Singapore. This is as the Republic faces stiff competition from wealth centres such as Hong Kong and Dubai.

The fund manager does not expect the new measures to change the operations of the firm, which has been “fully entrenched” in Singapore for the past 15 years.

But the manager noted that they could make Singapore more competitive for new hedge funds deciding between jurisdictions.

Chasen Nevett, managing partner of the principal investments division at Singapore-based GMA Capital Partners, said the measures could make Singapore more competitive for incremental hires and new mandates, while encouraging Hong Kong to continue sharpening its incentives.

Making home-grown funds stick

One of the measures highlighted was ramping up support for Singapore’s financial sector with a new hedge fund investment programme.

This follows sovereign wealth fund GIC’s earlier announcement of plans to commit a further US$30 billion to hedge funds over three years.

APS’ Wong said there should be greater emphasis on nurturing home-grown asset managers, which are less likely than global firms to shift people and capital between financial centres.

Their businesses, people, institutional relationships and sentiments are already rooted in Singapore, he added.

Dymon’s Kan pointed to three areas that could allow Singapore to remain competitive to attract talent.

First, the Republic could continue deepening the ecosystem around fund managers, including system developers, AI engineers, legal and compliance services and payroll. This is because managers ultimately consider the entire infrastructure available to support their operations.

Second, the country should keep investing in local talent development alongside efforts to attract global leaders, so the industry’s growth translates into long-term career growth for Singaporeans.

Third, the regulatory predictability and close industry consultation that got Singapore here in the first place ought to be maintained.

“This consistency is… worth more to a fund manager making a decade-long decision than any single incentive,” said Kan.

Beyond tax

In terms of other aspects that could draw talent to Singapore, Synnott noted that senior investment professionals are also considering factors such as quality of life, education, mobility, family considerations and long-term career prospects.

“These considerations can be highly influential, particularly when firms are seeking to relocate entire teams rather than single individuals,” he said.

Larry Ikard, CEO of finance platform Yuvarra, said the same dynamic has been observed in the United States, where a number of financial firms moved their operations from New York to Florida.

The phenomenon started in 2021, when the pandemic accelerated remote work, prompting executives to move down south to seek lower tax burdens, warm weather and a higher quality of life.

“Tax has been one consideration, but lifestyle, the business environment and other practical factors have also played an important role,” Ikard said.

Additional reporting by Tan Nai Lun