THIS is a pivotal moment for the asset management industry in Singapore. The city state continues to benefit from ever growing demand for investment management solutions, underpinned by increased wealth, greater urbanisation, pragmatic legislative reforms and greater regional integration. But competition with other jurisdictions is becoming fiercer and Singapore cannot take its future success as a fund management hub for granted.

There are causes for optimism. Hedge funds and other alternative investment funds managed from Singapore are, on average, performing well. Average returns in the first half of 2016 were about 2 per cent, according to HedgeFund Intelligence (HFI) data, during a period when the Straits Times Index has been down about -1.5 per cent. The outperformance was even more marked for the 12 months to June period at about 14 percentage points. Hedge fund returns have been much less volatile than the equity market. Funds also are managing to avoid moving in step with the equity market - "beta", a measure of this, for the first half was only 0.34.

The underlying growth rate is strong. According to the most recent statistics from the Monetary Authority of Singapore (MAS), which were published last year, Singaporean hedge fund firms manage around S$108 billion in assets, up 21 per cent on the previous year.