Hedge Fund Investors in the Lion City – February 2016

by Patrick Maulion

  • 05 Feb 2016
  • HF

As one of the leading financial centres in Asia, Singapore has become a significant source of capital for the hedge fund industry. According to Preqin’s Hedge Fund Investor Profiles module on Hedge Fund Online, there are currently 62 hedge fund investors based in Singapore, managing approximately $1.1tn in assets, trailing only Japan and Hong Kong with 118 and 87 institutions respectively. Singapore-based investors currently account for 16% of the total capital allocated to hedge funds in Asia.

As shown in the chart above, private wealth firms make up the majority of hedge fund investors headquartered in Singapore, while fund of hedge funds managers (18%) and asset managers (10%) also make up notable proportions of this universe. The largest Singapore-based institution by current allocation to hedge funds is the sovereign wealth fund Government of Singapore Investment Corporation (GIC), which has more than $10bn invested in the asset class.

In terms of strategy preferences, macro strategies funds are favoured by 68% of Singapore-based hedge fund investors. This strong preference for macro strategies is unique to Singapore-based investors; when compared to their peers in the region, 42% and 36% of hedge fund investors in Japan and Hong Kong display a preference for macro strategies. Long/short equity (58%), multi-strategy (38%), long/short credit (30%) and managed futures/CTAs (30%) are also preferences of large proportions of Singapore-based investors.

Nearly three-quarters of Singapore-based institutional investors target investment globally, while comparatively, only 49% will target investment in their domestic continent. A greater proportion of Japan- and Hong Kong-based hedge fund investors maintain a preference for North America-focused hedge funds (33% and 22% respectively) compared with 13% of Singapore-based investors targeting the region.

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