EXCLUSIVE INTERVIEW: Singapore – Building Asia’s Leading Hub For Investment Management

The Investment Management Association of Singapore (IMAS) is a representative body of investment managers spearheading the development of the industry in Singapore; it was formed in September 1997.

IMAS fosters high standards of professionalism and promotes exemplary practice among members. It also provides a forum for members on industry-related discussions; serves as a collective for voice for the industry; facilitates training for members; and contributes towards investor education.

Note: Singapore assets under management rose to S$2.4 trillion in 2014 (Source: The MAS 2014 Singapore Asset Management Survey).

The Asian Wealth Times recently spoke with Michael Lim, executive director at IMAS, Singapore to get a sense of how his members are coping with the challenging market conditions and what the IMAS does in order to keep Singapore ahead.

 

AWT: What would you say is top of the list of your members concerns right now, is it lack of a deep talent pool, increasing regulatory demands or  another issue?

The top concerns for our members are always investment performance and AUM (Assets under Management). Talent and regulations do affect our members, and some are better resourced to handle these challenges than others. Regulatory change, which has been such a major focus globally, has at least begun to stabilize on a relative basis.

 Talent is very important. We continue to attract investment talent to Singapore, which is encouraging. We are also looking at what can be done to support our industry across functions from post-secondary education through to professional development.

AWT:Are your members nervous about the recent oscillations of the Chinese market, the slowdown there and the predicted Federal Reserve rate rise?

The sudden weaknesses experienced in the Chinese markets startled many fund managers and it had a ripple effect globally, particularly in the Asia Pacific region. And, of course, now all eyes are on the Fed. Janet Yellen’s most recent comments point to a rise before the end of 2015. If and when this happens, it would help to lessen the uncertainty for investors.

AWT: Singapore works with regional and international investors and is also a regional hub for an increasing number of institutional investors; do the managers invest predominantly within Asia too?

About 80% of our AUM is sourced from outside Singapore, led by Asia-Pacific, Europe, and then the US. Yes, managers do invest primarily within the Asia-Pacific region, and a material portion of that goes to ASEAN countries. This certainly indicates our country’s role in serving both regional and international investors.

AWT: Is the IMAS working on bringing in more institutional investors, pension funds and family offices to Singapore? Does the IMAS conduct road shows/presentations into the traditional financial hubs of London, New York and Zurich?

There is of course a push to bring in more institutional investors, pension funds, and family offices to Singapore and IMAS is committed to this expansion.  Although we don’t undertake any roadshows, we are involved with similar regional and international associations and are happy to assist and contribute where we can.

AWT: In Asia, is Hong Kong the sole competitor to Singapore or do Tokyo or say Shanghai threaten to dilute Singapore’s offering as an Investment Management hub?

In many ways, Singapore and Hong Kong are very similar, for example, no capital gains, stable governments and thorough market regulations. Both can be considered gateways in their own right to various parts of Asia and in many ways Singapore and Hong Kong can be perhaps be viewed as complements rather than competitors.

 Tokyo and Shanghai are also sizable and attractive Asian financial centres. For the large North Asia region, geographically, they would be in direct competition with Hong Kong.

For Singapore, there are perhaps some benefits to not being too close to what is going on in any one particular market, but rather having a broader perspective across Asian markets in general.

AWT: There is a lot of hysteria surrounding the influence of disruptive Fintech solutions and how technology is changing traditional financial services, how is this transformation affecting IMAS members?

Technology has been a major feature of the investment management industry for a number of years - whether that has been to increase transparency to meet regulatory requirements, to improve efficiency and operations, or to generate investment returns. So, in this regard, Fintech is not entirely new in our industry. 

That said, we are living in a time of accelerated innovation and some of those innovations are bound to lead to changes in business models in the future, whether it is on the investments or distribution platforms.

Some examples include robo-advisors, automated investment services platforms, and comprehensive information technology. In spite of the uncertainties presented by disruptive technologies, if they are appropriately embraced, our industry will be able to ultimately harness the benefits for its clients.

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