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Singapore can bridge the East and West
Jocelyn Oh
Commercial Director, Fund Services Intertrust Singapore
Having focused on Alternative Investments for more than a decade, Jocelyn is a veteran in the asset management and capital markets services space. Her forte is in executing complex multi-country transactions, creating and maintaining Funds, Special Purpose Vehicles and Orphan Structures globally for Sovereigns, Private Equity and Hedge Funds.
Prior to joining Intertrust Group, Jocelyn led the business expansion strategies in APAC, at TMF and Citco. She also held various leadership roles in a UCITS hedge fund as well as in Citibank and HSBC. Jocelyn is currently responsible for building up the funds servicing capabilities and business for Intertrust Group.
China and the West have different approaches to business. China, like much of Asia, is an emerging market in all senses, while the West runs on long-established principles and laws.
However, China is the world's second-biggest economy and its significance on the world stage is growing rapidly. We can't yet tell when these two economies will finally converge – but in the meantime, Singapore could be the 'gateway' between them.
China's differences
The differences between China and the broader financial world are highlighted to some extent in new research* Intertrust Group commissioned in association with Global Custodian and outlined in a new report, entitled: The future private capital CFO: Evolving in a digital age.
The findings show that CFOs at private capital funds in China expect their limited partners, many of whom include sovereign wealth funds and state pension funds, to require data updates with increasing frequency over the next decade. Eight out of 10 respondents (80%) expect their investors to be looking for access to live or daily updates on portfolio performance and 71% on operational service level agreements (SLAs). Chinese CFOs anticipate more priority to be placed on these than their global peers: data for CFOs worldwide were 64% and 50% respectively.
However, Chinese CFOs put less focus on ESG, with only 40% of them expecting live or daily update demands versus 51% globally.
Keen to establish a performance track record
The prime focus on performance among Chinese CFOs is unsurprising. China, and Asia too, are seeing a lot of new fund managers, many of whom formerly worked for global companies and are keen to establish good performance track records to attract investors. When it comes to funds, Asia is truly in the ascendant.
The emphasis on SLAs is also unsurprising. This reflects the business climate in China, where there is a strong desire to improve processes and a lot of domestic regulations.
As much as ESG is not a top priority in China, or indeed other emerging markets in the region, it is on the radar. China might not impose the same penalties and taxes on ESG breaches that Europe and the US does, but it does encourage sustainability where possible and it is one of the biggest sovereign green bond issuers, as well as home to several of the world's biggest solar hubs.
Singapore as a bridge
Over time, the results in China and the world will likely converge.
However, this won't necessarily mean that China will conform to the rest of the world. Given China's growing importance, many other countries might have to adapt to its operational standards, which involves more frequent and intense levels of data.
If our survey were to have been conducted in Singapore with a robust sample size, the results would most likely mirror those in Hong Kong, Australia, the US and Europe.
Business in Singapore is conducted according to English law and the business mentality is similar to the West's.
However, Singaporeans are eminently capable of doing business in China too. Around 70% of Singaporeans are Chinese, so language and culture present no barriers. Singapore is also in the same time zone as China, with which it has a very focused and open relationship.
These factors mean Singapore is uniquely and ideally placed to act as a bridge between East and West. It can provide independent support for both sides of the financial world. As much as it is a gateway into South East Asia, it is also a good platform for Chinese and Asian fund managers to reach out to the world.
Why Intertrust Group
In terms of asset management, Singapore is a regional hub. It is growing significantly in terms of its offerings, including the recently launched and highly popular Variable Capital Company (VCC). It has a stable political and commercial environment served by a deep and varied talent pool. The government regulatory environment is business-friendly and it is a great place for families. Many financial companies find it easy to set up here.
Intertrust Group is also an ideal partner for fund managers in Singapore. One of the largest administrators in the market, we have been established for more than 30 years and we offer an end-to-end suite of administrative services.
We offer the expertise required to navigate and manage complex regulatory and reporting requirements that grow by around 30% a year and have state of the art in-house proprietary technology, making it easy even for new managers to establish themselves in Singapore and focus on their main role, which is to deliver outstanding investment performance.
*Source: Global Custodian in partnership with Intertrust Group; a global sample of 300+ chief financial officers at private capital funds were surveyed between 20 November 2020 and 26 January 2021, including 88 in the US