Subsequent articles in this Quarterly Report focus on the recent history of the treatment of private funds in China, a new route to trade Shanghai-listed securities, and funds passporting in Asia. With the opening of our office in Singapore – our 27th globally – we wanted to introduce readers to another of the key global financial centres.
The importance of the city state as a financial centre is both incontrovertible and – in common with Hong Kong – out of proportion to its size. Despite a population of only 5.4 million, Singapore is home to over 200 banks, in excess of 500 entities in the asset management industry licenced under one of the MAS (Monetary Authority of Singapore) regimes, and the fourth-largest foreign exchange market globally, not to mention being the listing location for approximately 800 companies. The financial sector contributes 12% of Singapore’s GDP and employs more than 180,000 professionals.
China is Singapore’s largest trading partner, and the free trade agreement existing between the two countries paved the way for Singapore to become the first offshore RMB centre outside of North Asia. And, continuing the theme of co-operation in the RMB field, the co-authors of a following article in this Quarterly Report – relating to new regulatory developments in the area of renminbi-denominated private funds – represent both Dechert’s Singapore and Beijing offices.
Another emerging global force, India, also has a free trade agreement with Singapore alongside a double-taxation treaty that many feel is more robust than India’s treaty with Mauritius. The election earlier this year of Narendra Modi, a pro-business leader who has vowed to open India’s doors to foreign investment and loosen the red tape that has inhibited growth over the years, seems likely to create even greater opportunities for Singapore’s financial services sector.
Our new Singapore office also has close links to clients in Indonesia, the fourth most populous country on earth with a population of approximately 254 million, and which, like India, has elected a pro-business president this year. A large number of global financial services groups have already identified the potential of the Indonesian economy, making inroads into the country across a variety of asset classes – in the private equity space, TPG has collaborated with Northstar, Indonesia’s largest local private equity group, while CVC has generated stunning returns to date through its investment and partial exit of Matahari, an Indonesian department store. Other names with a presence in Indonesia include Schroders, BNP Paribas and Manulife Asset Management, while Aberdeen Asset Management Asia acquired an 80% stake in a local mutual fund manager earlier this year. Recent structural changes in the regulation of financial services institutions in Indonesia – notably, creating a single regulatory body, the Financial Services Authority – have been broadly welcomed and bode well for the continued development of the asset management industry.
Enhanced co-operation between the members of ASEAN, the sub-region’s economic bloc, will doubtless enhance opportunities, and a subsequent article in this Quarterly Report discusses the ASEAN CIS (Collective Investment Scheme) Framework for Cross-Border Offering of CIS, which was recently entered into between Singapore, Thailand and Malaysia, three member states of ASEAN.
Further, Hong Kong is a neighboring major financial center, and our local office there provides Dechert with the ability to cover this part of the world effectively from an additional key location.
The Singapore office enhances the breadth of Dechert’s global financial services offering, and we look forward to providing you with updates on some of the critical developments in the financial services industry across the region in future editions.
