Swiss-Asia Financial Services Pte is on track to more than double the number of funds on its platforms this year as tighter regulation in Singapore makes it more expensive for fund startups to set up on their own.
The platform operator is adding 17 hedge funds and one private-equity fund, bringing the total to 34 from 16 at the end of 2014, Chief Executive Officer Olivier Mivelaz said in an interview on July 17. The firm’s assets under management, which include accounts managed by independent wealth managers, are expected to gain to S$2.5 billion ($1.8 billion) from S$1.5 billion at the end of 2014.
Swiss-Asia, which on average added one fund per year during the 10 years since its inception in 2004, is benefiting after the Monetary Authority of Singapore in 2012 imposed on fund managers stricter audit and capital requirements, reporting and business conduct rules, and more restrictions on assets under management.
“The last 15 months have been unbelievable,” Mivelaz said. “We are being contacted by people in London, Hong Kong, China, from everywhere.”
The platform allows fund managers to work under its license and provides office space and services like risk management and compliance at lower costs compared to expenses incurred by funds setting up on their own. Swiss-Asia got eight new funds on board last year, according to its website.
The average size of new funds joining the platform is $10 million to $20 million compared with $5 million to $10 million previously, Mivelaz said. One new fund even has assets of $90 million, he said.
Asia-based hedge funds oversaw a combined $100 billion as of June, 77 percent more than their April 2009 trough, according data provider Eurekahedge Pte. In Singapore, 289 fund-management companies had about $20 billion of assets under management as of June, compared with about $32 billion managed by 473 firms in Hong Kong, according to the Singapore-based data provider.
Swiss Asia is also seeing interest from private-equity firms to join the platform, Mivelaz said.
“Interest rates are more or less at zero, so large investors are looking for other sources of revenue, and one is definitely private equity,” he said.
Out of the 18 funds joining Swiss-Asia this year, only two are starting in Hong Kong, where the firm began its second platform in 2014, Mivelaz said. Hong Kong has “a different culture and a different governance system,” he said.
Of the S$2.5 billion expected by the end of the year, about two-thirds will be from independent wealth managers invest, Mivelaz said. Swiss-Asia will lure more of them as more private bankers leave their employers and start their own businesses, he said.