Singapore plans hedge-fund capital

Posted on | March 8, 2010 | No Comments



By BLOOMBERG


SINGAPORE: Singapore is planning to create its own hedge-fund capital modelled after Greenwich, Connecticut, in a cluster of ex-British army homes called Nepal Hill, a 15-minute cab-ride from the city-state’s main banking district.

The Monetary Authority of Singapore and JTC Corp – the government agency developing and marketing the project in Nepal Hill – quietly asked hedge fund managers in January to visit the district’s so-called black-and-white bungalows, named for their white-washed walls and dark timber frames, according to a copy of the invitation obtained by Bloomberg News.

Singapore is seeking to attract firms planning to expand in the region as Asia leads the global economic recovery and the US and Europe increase regulation.

The proposed cluster follows tax and regulatory incentives that have made it easier for funds to set up shop on the island than in Asian cities such as Hong Kong and Tokyo, helping the industry grow from near zero in 1997 to almost 140 firms today.
Aisling Analytics Pte will “certainly look at it as a potential location” when its lease at Suntec City, next to the central business district, comes up for renewal, said Michael Coleman, the hedge-fund firm’s managing director.

Rents in Singapore, the most expensive in Asia after Tokyo and Hong Kong, fell 46 per cent, on average, in the fourth quarter, the steepest decline in the region from a year earlier, according to Boston-based commercial real estate company Colliers International.

The average top-grade office monthly rental in Singapore’s central business district fell to an average of S$6.29 (S$1 = RM2.40) per sq ft in the last quarter, Colliers said in a report.

Nepal Hill is part of a development called “one-north”, referring to Singapore’s location one degree north of the equator, that is already home to industry clusters including Singapore’s biomedical research hub, Biopolis.

The 180-hectare area will be developed in stages within the next 20 years, JTC said in the invitation to managers.

The island-state’s hedge fund industry has grown to 138 single-strategy hedge-fund managers employing more than 800 professionals from near zero in 1997, according to a survey by the local chapter of the Alternative Investment Management Association.

The industry oversees at least US$34.9 billion, excluding assets managed by several of the large global firms, it said, making it Asia’s second biggest behind Hong Kong.

Nepal Hill will “need at least one substantial anchor tenant” to draw potential investors in funds to the site, said Peter Douglas, the principal of GFIA, a Singapore-based hedge- fund consultancy firm that also runs a wealth management firm.

“Nepal Hill has been chosen for its unique ambience of black and white architectural heritage amid the key research clusters, and these bungalows will be the ideal setting for offices for the alternative investments,” JTC and the monetary authority said.


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