HSBC & Chartered Asset Management incorporate Singapore VCC
CAM is one of 18 fund managers who are participating in the Pilot Programme announced by the Monetary Authority of Singapore (“MAS”) and the Accounting and Corporate Regulatory Authority (“ACRA”) in September 2019. Post Pilot and refinement, the VCC framework will be rolled out for wider commercial use.
As a participating fund manager, CAM appointed HSS as Administrator and Custodian to support in the process of re-domiciling all its three funds with a total AUM of US$210 million from Mauritius to Singapore as three VCCs.
The re-domiciliation of CAM’s three funds into the VCC framework, expected to complete in 3Q2020, follows the post-Pilot launch of the VCC in January 2020.3
Colin Lee, Managing Director of Chartered Asset Management: “Prior to the VCC, we would have to establish new entities in Singapore, liquidate the existing investments in each of the Mauritian funds, and inject the cash into the new entities, erasing the funds’ track record. With HSBC’s support, the VCC programme will allow us to re-domicile our funds with existing assets and track records intact.”
Tony Lewis, Head of HSBC Securities Services, HSBC Singapore: “We are delighted to have supported CAM in successfully utilising the VCC. This test-case has demonstrated that the VCC is a viable structure that responds directly to industry demand and paves the way for wider adoption by global asset managers.”
Singapore has grown to become a key asset management hub in Asia, connecting global investors to the region and facilitating financing opportunities in Asian investible asset classes:
- US$2.5 trillion AUM of Singapore based asset managers4
- 787 registered and licensed fund managers in Singapore5
- 14% 5 years CAGR of AUM for Singapore based asset managers6
Underpinned by a thriving fintech ecosystem, the Republic has also become the center for capital raising and infrastructure financing in Southeast Asia; 25% of the US$6bn investment in Southeast Asia is accounted for by Singapore.7
70% of offshore funds sold in Singapore are corporate form funds that are domiciled in foreign locations8; so a huge amount of facilitation happens offshore, in support of wealth which is managed onshore.
Global institutions and investors are now looking to consider using more localized structures in Asia, as the global push for more substance and transparency takes hold.
The VCC has been introduced to bridge that gap. The new legal structure and corporate investment vehicle will allow funds to access Singapore’s network of tax treaties and free trade agreements.
Mr Lewis continued: “With a globally recognised structure, the VCC is potentially a game changer in Singapore, putting it firmly on the world domiciliary map. With US$2.5t trillion assets under management, Singapore is already a leading international wealth and asset management hub and adding a new fund vehicle to asset manager’s options will support future growth of the industry. As South Asia continues to garner interest from the world’s investors and asset managers, the VCC is expected to further attract interest in the Republic as a global gateway to the region.”
2 Monetary Authority Singapore: Note on Variable Capital Companies Miscellaneous, 24 September 2019
4 Monetary Authority of Singapore: 2018 Asset Management Survey
5 Monetary Authority of Singapore: 2018 Asset Management Survey
6 Monetary Authority of Singapore: 2018 Asset Management Survey
7 HSBC Securities Services and MAS: Introduction to Singapore’s Variable Capital Company
8 PriceWaterhouseCoopers: Singapore Variable Capital Company (S-VACC)