Bank Of Bermuda Considers Singapore As Location For Fund Incubator

by Robert Lee, Tax-News.com, London

18 July 2001

According to news reports from Singapore, the Bank of Bermuda is considering setting up an incubator to assist 'homegrown' fund managers in establishing hedge funds in Singapore.

The Bank has conducted a survey of hedge fund managers in Asia which concluded that there was a mere total of 89 managers on the continent with an estimated US$3.5 billion in assets representing a tiny fraction of the global assets of hedge funds of between US$400 billion and US$500 billion. Of the 89 managers, 11 are based in Singapore and have assets of around US$156 million. Hong Kong was home to the majority of managers, totalling 33 with assets of US$1.47 billion.

The incubator will act as a one-stop shop enabling managers to join in 'ready-made' offshore umbrella hedge funds which are expected to be domiciled in the Cayman Islands. The Bank of Bermuda's decision to move in on the Asian region comes on the back of the surge in popularity for hedge funds in the US and Europe, and the growing interest in hedge funds on the Singapore and Hong Kong fronts.

Joanne Murphy, the bank's head of hedge funds for Asia told the Singapore Business Times: 'We know our clients, and there's an appetite in Asia for incubators. We're now looking at the correct structure ... We're very encouraged by the response in Singapore. There's a lot of interest, as this allows managers to get an offshore investment vehicle up and running.'

The Bank of Bermuda says its incubator will not provide seed capital, but it will not require any particular minimum fund size for entry either. When managers are accepted they will be permitted to remain within the incubator until their assets grow to US$10 million.

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