In an ever-evolving financial landscape, Singapore’s economic growth is projected to slow to about 0.5% to 2.5% year-over-year in 2023, following a rate of 3.6% year-over-year in 2022. Against this backdrop, making informed decisions becomes paramount to maximising returns and protecting wealth.
As of 2023, Singapore’s financial landscape presents challenges due to economic conditions and evolving market dynamics. Navigating these complexities requires expertise and a strategic approach. With this, asset management plays a crucial role in unlocking the full potential of your investments. By entrusting this role to the right asset management firm, you can be equipped with professional guidance, disciplined investment strategies, and tailored solutions that align with your financial goals. These MAS-registered fund management firms are recognised for their adherence to regulatory standards and commitment to client protection, providing investors with an added level of confidence and assurance.
Importance of choosing a MAS-registered Asset Management Firms
The Monetary Authority of Singapore (MAS) is the regulatory authority responsible for overseeing the financial sector in Singapore. MAS-registered asset management firms adhere to strict regulatory standards and are subject to ongoing supervision, ensuring a high level of professionalism, integrity, and investor protection.
Why choose a MAS-registered fund management company?
A MAS-registered fund management company adheres to the highest regulatory requirements. They strictly follow applicable laws and regulations, reducing the risk of noncompliance and establishing a transparent and accountable investing environment.
Conflicts of Interest:
Strong processes are in place to address conflicts of interest as these firms are required by law to behave in the best interests of their clients fostering trust and ensuring that your investment goals remain the top priority.
Risk Management Standards Compliance:
The MAS places a heavy focus on risk management, and registered firms are obliged to adopt effective risk management frameworks. This emphasis on risk management protects your investments and reduces potential mistakes.
Rockstead Capital as Your Asset Management Firm
When it comes to selecting an asset management firm, Rockstead Capital stands out as a trusted partner with a track record of delivering strong investment returns for clients. With our in-depth research and analysis, we can guide your investment decisions with a focus on long-term growth and capital preservation. Our dedicated team builds long-term relationships with our clients, understanding their unique needs and aspirations. We pride ourselves on providing exceptional service and tailoring our strategies to align with your financial goals.
If you’re seeking an asset management firm that combines expertise, regulatory compliance, and personalised service, we invite you to learn more about Rockstead Capital. Contact us today to schedule a consultation and discover how our team of experts can help you unlock the full potential of your assets.
For high-net-worth people navigating today’s unpredictable financial markets, having reliable financial advisory and wealth asset management services are critical. These services offer expertise knowledge, strategic planning, and tailored solutions that will help them optimise wealth generation, preserve assets, and avoid risks. Financial experts provide relevant industry insights to help clients make informed but unbiased decisions in a complex market. Overall, financial consulting and wealth asset management play critical roles in guiding clients in navigating the intricacies of financial markets and achieving their wealth management objectives.
How Wealth Asset Management Can Affect Future Generations
Wealth Asset Management is a critical pillar in managing the complex environment of markets in the finance industry. It manages the assets of high-net-worth individuals even for their future generations to come. External Asset Management (EAM) is one of the customised services that provide independent and unbiased guidance to clients and its goal is to optimise their wealth and gives them several advantages of getting expert financial advice in wealth asset management. This extends beyond the present and plays a crucial role in safeguarding wealth for future generations. Planning for the future allows one to make proactive measures.
Here are some ways on how wealth asset management might impact future generations:
Multi-Generational Wealth Growth: Strategic private wealth management in Singapore can help assets grow and multiply over generations.
Legacy Preservation: Future generations can benefit from the wealth accumulated over time.
Financial Security: This provides financial security as wealth can be protected and managed.
The impact of wealth asset management on future generations goes beyond financial arrangements – it encompasses the creation of a lasting legacy and financial security that supports the aspirations and opportunities of the succeeding generations. By implementing a plan, families can establish a solid foundation for their descendants, ensuring a prosperous and secure future. It’s better to take charge now to shape the future of your family. Legacy building creates something that outlives you, bringing lasting value to future generations. To make it simpler, ask yourself this: What do you want your family’s future to look like?
Benefits of Rockstead Capital’s Bespoke Wealth Management Services
At Rockstead Capital, we are committed to offering superior bespoke wealth management services that are tailored to your specific financial requirements. With our customised approach, we demonstrate a strong commitment to our core values, providing tailored goal-setting, access to special investment offerings, and a highly qualified team of professionals.
A. Customised goal-setting and financial planning services:
Our experienced advisors will work closely with you to understand your financial aspirations and create a tailored plan to help you achieve them.
B. Access to proprietary investment offerings and value-based strategies:
As a client of Rockstead Capital, you will have access to our exclusive proprietary investment offerings. Our team diligently identifies investment opportunities across various asset classes and product structures.
C. Highly qualified team of experts:
The team consists of highly qualified professionals with deep expertise in wealth management that has a wealth of knowledge and experience across investment management, financial planning, and risk assessment. Unbiased and comprehensive advice will be tailored to your specific financial objectives.
D. Commitment to core values:
Integrity, transparency, and a client-centric approach are at the heart of our business. Our commitment to these core values ensures that your best interests are always paramount in every decision we make.
Take the first step towards a secure and prosperous future by contacting us now. Let us help you navigate the complexities of wealth management and unlock the full potential of your financial resources. Don’t wait, seize the opportunity to achieve your financial aspirations with Rockstead Capital.
Choosing the right fund management company in Singapore is a critical decision for investors, particularly for high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs). The success of your investments often depends on the expertise and capabilities of the fund management company you select.
What is Fund Management?
Fund management involves the professional management of investment funds on behalf of clients. Fund managers are responsible for making informed investment decisions, conducting market research, and optimising portfolio performance. Effective fund management is crucial for maximising investment returns while minimising risks. It requires expertise in analysing financial markets, selecting appropriate investment strategies, and adapting to changing market conditions. Investing through a fund management company offers several advantages. It allows investors to access professional expertise, diversified portfolios, and economies of scale. Additionally, it frees investors from the burden of day-to-day investment management, enabling them to focus on other aspects of their financial goals.
Fund Management in Singapore
Singapore’s asset management industry has experienced remarkable growth, outperforming global trends. According to the Monetary Authority of Singapore (MAS), the total assets under management in Singapore rose by 16% to S$5.4 trillion ($3.8 trillion) in 2021. This growth rate surpassed the global average of 12%, solidifying Singapore’s position as a leading hub for asset management.
Its fund management industry operates within a robust regulatory framework established by the MAS. The MAS sets high standards for transparency, risk management, and investor protection. These regulations ensure that fund management providers adhere to best practices, providing a safe and secure environment for investors.
4 Factors to Consider When Choosing a Fund Management Company
Evaluating the track record of a fund management provider is crucial. Look for a company with a proven history of delivering consistent and competitive returns over an extended period. Consider their performance in various market conditions and their ability to meet investment objectives.
Assess the investment expertise of the fund management provider. Look for a team with deep market knowledge and a strong track record of making successful investment decisions. Their ability to identify opportunities, conduct thorough research, and implement effective strategies is paramount to achieving long-term investment success.
Risk Management Capabilities
Effective risk management is essential to preserve and grow your investment capital. A reputable fund management provider should have a robust risk management framework in place. This includes implementing risk assessment tools, employing diversification strategies, and closely monitoring market risks to protect investors from potential downturns.
Ensure that the fund management provider operates within the regulatory guidelines set by the relevant authorities. Compliance with legal and ethical standards is critical to protect your interests and maintain the integrity of your investments.
Rockstead Capital Singapore is a highly regarded fund management company with a strong reputation in the industry. With a team of experienced professionals, Rockstead offers comprehensive wealth management solutions tailored to meet the unique needs of HNWIs and UHNWIs. Its proven track record of delivering consistent returns and managing risk effectively. Their investment expertise spans various asset classes and market sectors, ensuring a well-diversified and resilient portfolio.
We invite accredited investors to explore Rockstead and discover how their innovative strategies and personalised solutions can help you achieve your financial goals. Visit the website or get in touch with the team to learn more about the range of services you can access.
As the global economy continues to evolve and interconnect, international trade remains a vital driver of economic growth and development. At the heart of this global trade lies trade finance, a financial sector that has experienced significant growth in recent years, fueled by the increasing demand for efficient and secure cross-border transactions. Trade finance has emerged as an attractive alternative asset class for private debt investors, who seek to capitalize on its unique risk-return profile and low correlation with traditional investments.
This article explores the attractiveness of trade finance as a private debt investment, delving into its essential role in facilitating global trade, market size, growth potential, and various financial instruments. We will also discuss the benefits of trade finance as a diversification tool, its risk-return profile, and the social and environmental impact of these investments. Additionally, we will examine the challenges and risks associated with trade finance investments and present various investment strategies and vehicles. Through a comprehensive analysis, we aim to highlight the compelling nature of trade finance as a private debt investment opportunity and provide insights for investors looking to diversify their portfolios in this dynamic and growing market.
UNDERSTANDING TRADE FINANCE
Definition and Types of Trade Finance Instruments
Trade finance is a crucial aspect of international commerce that facilitates the import and export of goods and services. It encompasses a range of financial instruments and techniques designed to bridge the gap between the payment obligations of importers and the delivery expectations of exporters. This financial support reduces the risk involved in cross-border transactions and ensures the smooth flow of goods and services.
Key trade finance instruments include:
Letters of Credit (LC): A bank-issued document that guarantees payment to the exporter upon meeting certain conditions, such as providing proof of shipment. This instrument mitigates the risk of non-payment for the exporter and ensures timely delivery for the importer.
Bank Guarantees: A promise from a financial institution to cover the financial obligations of a buyer or a seller in case of default, thereby reducing counterparty risk.
Documentary Collections: A process in which banks facilitate the exchange of payment-related documents between importers and exporters, acting as intermediaries without providing a payment guarantee.
Trade Credit Insurance: A policy that protects the exporter against the risk of non-payment by covering a percentage of the outstanding receivables.
Factoring and Forfaiting: Financing techniques where exporters sell their receivables at a discount to financial institutions, which then assume the credit risk.
Role in Facilitating International Trade
Trade finance plays a pivotal role in promoting international trade by addressing the challenges and risks inherent in cross-border transactions. It offers various benefits to importers, exporters, and financial institutions, such as:
Risk Mitigation: By providing payment guarantees and insurance, trade finance reduces the risk of non-payment for exporters and ensures the timely delivery of goods for importers.
Improved Cash Flow: Trade finance solutions, such as factoring and forfaiting, enable businesses to access working capital, allowing them to fulfil orders and manage cash flow effectively.
Access to Financing: Particularly important for small and medium-sized enterprises (SMEs), trade finance can help overcome the limitations of traditional bank lending, providing alternative sources of funding.
Enhanced Trust and Confidence: Trade finance instruments, such as letters of credit, build trust between counterparties by involving well-established financial institutions as intermediaries.
Economic Growth: By fostering international trade, trade finance contributes to economic development, job creation, and poverty reduction in both developed and emerging markets.
In summary, trade finance is an essential enabler of global trade, offering various financial instruments that mitigate risks, enhance cash flow, and promote economic growth.
MARKET SIZE & GROWTH POTENTIAL
Trade finance is a substantial market, with an estimated global goods trade value of over $20.8 trillion annually as of 2021. It has experienced consistent growth in recent years, driven by the surge in international trade, advancements in financial technology, and increasing demand from small and medium-sized enterprises (SMEs) for alternative funding sources. According to various industry forecasts, the global trade finance market is expected to grow at a compound annual growth rate (CAGR) of approximately 5.6% in the coming years, reaching a valuation of around $35.8 trillion by 2031.
Factors Driving the Growth of Trade Finance
Several factors contribute to the expansion of the trade finance market:
Globalization: As economies become more interconnected, the demand for efficient and secure trade financing solutions continues to rise. The growth in cross-border e-commerce and the increased participation of emerging markets in global trade have further fueled this demand.
Financial Inclusion: Trade finance plays a critical role in providing access to capital for SMEs, which often face challenges in obtaining funding through traditional banking channels. As governments and financial institutions increasingly recognize the importance of SMEs in driving economic growth, they are promoting policies and initiatives to facilitate access to trade finance.
Technological Innovations: Fintech companies are revolutionizing the trade finance landscape by developing digital platforms, blockchain solutions, and artificial intelligence-driven risk management tools. These innovations have the potential to streamline processes, improve risk assessment, and increase the overall efficiency of trade finance transactions.
Diversification for Investors: The low correlation of trade finance with traditional asset classes, coupled with its attractive risk-return profile, has piqued the interest of institutional and private debt investors seeking portfolio diversification.
Emerging Markets and Untapped Opportunities
Emerging markets, particularly in Asia, Africa, and Latin America, represent a significant growth opportunity for trade finance, as they are expected to account for a larger share of global trade in the coming years. However, these markets also face a substantial trade finance gap, estimated to be around $1.7 trillion annually, with SMEs being the most affected. This gap highlights the potential for private debt investors to capitalize on the unmet demand for trade finance in these regions, while also contributing to economic development and financial inclusion.
In conclusion, the trade finance market offers substantial growth potential for private debt investors, driven by factors such as globalization, financial inclusion, and technological innovations.
The emerging markets, in particular, present untapped opportunities that can be leveraged by investors seeking to diversify their portfolios and capitalize on this growing asset class.
LOW CORRELATION WITH TRADITIONAL ASSET CLASSES
Benefits of Portfolio Diversification
Portfolio diversification is a key strategy for investors seeking to minimize risk and enhance returns by spreading their investments across various asset classes. Trade finance, as a private debt investment, exhibits a low correlation with traditional asset classes such as stocks, bonds, and real estate. This low correlation is mainly due to the unique characteristics of trade finance transactions, which are typically short-term and backed by tangible goods.
Investing in trade finance can, therefore, help investors achieve better risk-adjusted returns by reducing the overall portfolio volatility and providing a cushion against market downturns. Moreover, the short-term nature of trade finance investments allows for a more rapid response to changing market conditions, further enhancing their appeal as a diversification tool.
RISK-RETURN PROFILE OF TRADE FINANCE
Credit Risk and Default Rates
One of the primary risks associated with trade finance investments is credit risk – the risk of non-payment by the borrower. However, the credit risk in trade finance is generally lower than that in other private debt investments, owing to the collateralization of the transactions and the involvement of reputable financial institutions as intermediaries.
Historically, default rates for trade finance transactions have been low, with estimates ranging from 0.02% to 0.25%. This is partly due to the short-term nature of trade finance and the rigorous due diligence processes employed by banks and other financial institutions. Furthermore, the self-liquidating nature of trade finance transactions ensures that the risk of non-payment is significantly reduced.
Risk Mitigation Strategies in Trade Finance
Trade finance providers employ various risk mitigation strategies to manage credit risk effectively. These may include:
Collateralization: Trade finance transactions are often secured by the underlying goods, which can be liquidated to recover the outstanding amount in case of default.
Letters of Credit and Bank Guarantees: These instruments provide a payment guarantee from a reputable financial institution, reducing the risk of non-payment for the exporter and ensuring timely delivery for the importer.
Credit Insurance: Trade credit insurance protects the lender against non-payment by covering a percentage of the outstanding receivables.
Diversification: Spreading investments across different industries, regions, and counterparties helps mitigate the concentration risk associated with trade finance
In summary, the risk-return profile of trade finance investments is attractive due to the low correlation with traditional asset classes, lower default rates, and effective risk mitigation strategies. These characteristics make trade finance an appealing option for private debt investors seeking to diversify their portfolios and enhance risk-adjusted returns.
ATTRACTIVE YIELD & SHORT DURATION
Yield Comparison with Other Fixed Income Investments
Trade finance investments typically offer higher yields compared to other fixed income investments, such as government bonds and investment-grade corporate bonds. The attractive yields are partly attributed to the complexity and specialized nature of trade finance transactions, which often require a higher risk premium. Additionally, the shorter duration of these investments allows investors to benefit from the higher yields without being exposed to long-term interest rate and liquidity risks.
The yield on trade finance investments can vary depending on factors such as credit quality, transaction structure, and market conditions. However, it is not uncommon for well-structured trade finance deals to offer annualized returns in the range of 4-8%, making them an attractive option for income-seeking investors.
Benefits of Short-Term Investments
The short duration of trade finance investments offers several benefits to investors, including:
Lower interest rate risk: Short-term investments are less sensitive to changes in interest rates, reducing the potential impact of rate fluctuations on the portfolio’s value.
Improved liquidity: Shorter durations enable investors to reallocate capital more frequently, allowing them to respond more effectively to changing market conditions or investment opportunities.
Faster capital recovery: The self-liquidating nature of trade finance transactions ensures that capital is returned to investors more quickly, reducing the risk of non-payment and enhancing portfolio flexibility.
SOCIAL & ENVIRONMENTAL IMPACT
Supporting Small and Medium-Sized Enterprises (SMEs)
Trade finance plays a vital role in promoting financial inclusion by providing SMEs with access to capital that may be otherwise unavailable through traditional banking channels. By investing in trade finance, private debt investors can support SMEs in their growth and expansion, contributing to job creation, economic development, and poverty reduction. Furthermore, the increased financial access offered by trade finance can help level the playing field for SMEs in international trade, enabling them to compete more effectively with larger market participants.
Promoting Sustainable and Ethical Trade Practices
Investing in trade finance can also contribute to the promotion of sustainable and ethical trade practices. Many trade finance providers have started incorporating environmental, social, and governance (ESG) criteria into their investment strategies and due diligence processes, ensuring that the funded transactions adhere to responsible business practices.
By supporting companies that prioritize sustainability and ethical practices, private debt investors can help drive positive change in global trade while also mitigating reputational risks associated with financing environmentally or socially harmful activities.
In conclusion, trade finance investments not only offer attractive yields and short durations but also provide opportunities for investors to make a positive social and environmental impact. By supporting SMEs and promoting sustainable trade practices, private debt investors can contribute to economic development and improve global trade standards while enhancing the risk-adjusted returns of their portfolios.
CHALLENGES & RISKS IN TRADE FINANCE INVESTMENTS
Operational and Regulatory Risks
Trade finance investments are subject to various operational and regulatory risks, which can affect their performance and overall attractiveness. These risks may include:
-Compliance with international trade regulations, such as anti-money laundering (AML), know-your-customer (KYC), and sanctions requirements, which can be complex and time-consuming.
-Differences in legal frameworks and contract enforcement across jurisdictions, which may complicate dispute resolution and recovery efforts in case of default.
-Exposure to foreign exchange risk, particularly in transactions involving multiple currencies.
Political and Economic Uncertainties
Trade finance investments can be influenced by political and economic uncertainties in both the importer’s and exporter’s countries. Factors such as political instability, changes in government policies, and economic downturns can impact the creditworthiness of counterparties and disrupt trade flows, potentially affecting the performance of trade finance investments.
INVESTMENT STRATEGIES & VEHICLES
Direct Lending and Funds
Private debt investors can access trade finance investments through direct lending to borrowers or by investing in trade finance funds managed by specialized asset managers. Direct lending allows investors to have more control over their investments and negotiate customized terms, while investing in funds provides access to a diversified pool of trade finance transactions and professional management.
Structured Finance and Securitization
Structured finance and securitization offer another avenue for investors to gain exposure to trade finance assets. These investment vehicles involve pooling trade finance receivables into a special purpose vehicle (SPV) and issuing securities backed by the underlying assets. This approach allows investors to invest in trade finance assets with varying risk and return profiles, depending on the tranches they choose.
Fintech Platforms and Marketplace Lending
Fintech platforms and marketplace lending have emerged as innovative ways for investors to access trade finance investments. These platforms connect borrowers with investors, facilitating the origination, underwriting, and servicing of trade finance transactions. By leveraging technology, fintech platforms can offer greater transparency, lower fees, and more efficient processes compared to traditional investment channels.
Trade finance presents a compelling private debt investment opportunity, offering a unique combination of attractive yields, portfolio diversification, and positive social and environmental impact. As global trade continues to grow and technology reshapes the financial landscape, trade finance investments have emerged as a dynamic and growing market that warrants the attention of discerning investors.
The outlook for the trade finance market remains promising, with consistent growth expected over the coming years. The market is projected to benefit from the increasing demand for alternative financing solutions, particularly for small and medium-sized enterprises, as well as the ongoing advancements in financial technology that streamline and modernize the trade finance process. Investors who position themselves to take advantage of these future prospects are well-placed to capitalize on the attractive opportunities that trade finance investments present.
For investors seeking access to this exciting asset class, the Rockstead Resilience Fund provides an excellent opportunity. With a focus on well-structured trade finance transactions, the fund leverages our team’s deep industry expertise, rigorous due diligence, and effective risk management strategies to offer clients exposure to a diversified portfolio of trade finance investments.
By investing in the Rockstead Resilience Fund, clients can benefit from the attractive risk-return profile of trade finance, while also supporting SMEs, promoting sustainable trade practices, and contributing to economic development. As the global economy evolves and new investment opportunities emerge, the Rockstead Resilience Fund aims to be at the forefront, providing our clients with innovative solutions to enhance their portfolios and achieve their financial goals.
For more information on Rockstead’s services and fund offerings, please contact any of our relationship managers or email firstname.lastname@example.org.
,, International Chamber of Commerce (ICC) 2022 Trade Register Report, available at:2022 ICC Trade Register report: Global risks in trade finance (iccwbo.org)
“2021 Trade Finance Gaps, Growth, and Jobs Survey” by Asian Development Bank (2021), available at: 2021 Trade Finance Gaps, Growth, and Jobs Survey (ADB Brief No. 192)
In Part I of this article, we have briefly discussed the need for a framework to measure, evaluate, and compare the performance of an investment portfolio or investment fund. At Rockstead Capital, we also use this framework to objectively evaluate and improve the performance of our clients’ investment portfolios and in-house funds.
In this part of the article, we will discuss the importance of an investment portfolio to deliver stable and well-distributed positive returns, and how to construct such high performing portfolios.
The stability metric measures the consistency of positive returns, and there are multiple ways to define it. One straightforward way is to simply measure the percentage of months in which a portfolio managed to generate positive returns over a given period. A slightly more complex approach is to compute the number of consecutive positive monthly returns of the portfolio.
Regardless of the method used, the value of investing in a stable portfolio can be appreciated by observing the three hypothetical portfolios below. The stable Portfolio C generates positive returns that are evenly distributed across all time frames.
A stable portfolio is obviously more desirable because its returns over any time frame are predictable, which makes financial planning easier and helps investors avoid prolonged periods of underperformance.
HOW TO CONSTRUCT A HIGH PERFORMING PORTFOLIO
After discussing the various metrics for measuring portfolio performance, one may wonder how to construct a superior, high-performing portfolio. Our answer: strategy diversification and smart utilisation of leverage.
Every piece of investment advice starts with a discourse on diversification. The idea is to invest in asset classes that demonstrate little or no correlation with one another to enhance diversification and reduce portfolio volatility. This was sensible advice 20+ years ago. However, since 1973, stocks and bonds have been positively correlated nearly 70 percent of the time.
The problem is that as we, collectively as investors, have piled into various “uncorrelated” asset classes, we have created an unwanted but predictable consequence: the correlations across markets and asset classes have risen, reducing the benefits of diversification. In addition, numerous academic and practitioner studies show that correlations between assets tend to increase during periods of market downturn, precisely when diversification is expected to protect a portfolio. Therefore, diversification today is a lot more difficult than it was a few decades ago and sticking with the old playbook of “hold more diverse asset classes or foreign stocks” will no longer do the trick.
Given the limits of asset class diversification as an effective hedge, one approach to constructing a superior portfolio is to use a variety of anti-correlated investment strategies. These investment strategies can include trend following, momentum, reversal, carry trades, and volatility trading, among others. The key is to focus on strategy diversification rather than just asset diversification.
Anti-correlation & Leverage
Artemis Capital, based in Austin, published a research paper  about the macro shifts in long-range economic and monetary environments. One observation in the paper is that anti-correlation is an effective defensive component for a long-term, resilient portfolio. To recap and paraphrase this insight:
Suppose an investor is given the option to buy two out of three possible asset choices: Assets A, B, and C. The first two assets (A and B) are highly correlated, and both generate positive returns: 15 percent and 13 percent respectively. Asset C, on the other hand, produces a slightly negative yield of -5 percent but is countertrend to assets A and B. In other words, asset C makes the most substantial gains during periods when the other two assets (A and B) suffer drawdowns.
Which two assets produce the best portfolio? Counterintuitively, combining assets A and C produces a portfolio that generates superior, risk-adjusted returns (10 percent returns and -5 percent drawdown) even when one of the assets (C) generates a negative yield.
Given the much higher return-to-drawdown ratio of Portfolio A + C, one can simply apply leverage to the A + C portfolio to achieve higher returns with lower risk than either Portfolio A + B or holding any individual asset.
Though simple yet effective, many investors (and portfolio managers) have yet to fully appreciate or understand the immense value that a defensive asset brings to a long-term portfolio. As summarised by the Artemis research team, anti-correlation is more valuable than excess returns. Put simply, because the market is unpredictable, anti-correlation is key to negating nasty surprises and protecting wealth.
THE ROCKSTEAD PORTFOLIO CONSTRUCTION FRAMEWORK
Before implementing any investment portfolio, the framework dictates that we check the portfolio for sufficient diversification across asset classes, strategies, sources of alpha, and geographical exposure.
Considering various types of diversification should result in an investment portfolio that produces high risk-adjusted returns that are highly stable, have low downside correlation to global equities, and recover quickly from losses when they occur.
From our experience, strategy diversification probably has the largest impact on the stability and risk-adjusted benefits of an investment portfolio. We suspect that most portfolio managers do not discuss strategy diversification as often as asset class diversification because strategy diversification is extremely difficult to achieve.
To achieve effective strategy diversification, the portfolio manager must possess technical expertise in developing quantitative investment models that utilise a diverse pool of financial instruments, including derivatives, to trade various asset classes. An individual portfolio manager rarely has the expertise to develop investment strategies across all asset classes.
Furthermore, even if the portfolio manager is highly knowledgeable in strategy development, implementing these strategies often requires significant investment in infrastructure, technology, and people to manage operational risk. Such investment is usually out of reach for mid-size or small asset management companies or hedge funds.
Due to the size and scale of our firm, we have managed to establish a direct partnership with the structuring or financial engineering teams of top-tier reputable investment banks. These teams have proven records of strong strategy development and trade execution capabilities.
Such partnerships allow us to jointly design investment portfolios for our clients, enabling us to gain access to a diverse pool of proven investment strategies and obtain a level of diversification that most boutique hedge funds cannot achieve. Hence, the firm’s ability to scale and remain well-diversified is not limited by the size of our in-house trading and investment team.
DISCRETIONAL PORTFOLIO MANAGEMENT (DPM)
Family office clients can access high-performing investment portfolios through our Discretionary Portfolio Management (DPM) service. Our family office clients typically have a substantial amount of investment funds to deploy, allowing us to tailor their portfolios to their investment objectives and risk appetites. These discretionary portfolios are implemented in separate managed accounts, and assets from other clients are never commingled with these portfolios.
To further customise the risk-return profiles of clients’ discretionary portfolios, we can arrange with our banking partners to “wrap” selected strategies or baskets of strategies with a CPN (Capital Protected Note), Leveraged Notes, options, or warrants. Such wrappers or structures prove to be extremely helpful for clients who wish to protect their capital, set hard limits on losses, or gain leverage on their investments.
For accredited investors who wish to invest relatively small amounts, they can simply purchase either the Rockstead Quant Fund or Rockstead Resilience Fund. Both Funds are designed based on the same diversification principles and evaluated using our portfolio construction framework.
For more information on Rockstead Capital family office services and fund offerings, please contact any of our relationship managers or email email@example.com.
 The Allegory of the Hawk and Serpent – How to Grow and Protect Wealth for 100 Years, published in 2020
Researchers have found that most active managers underperform their appropriate benchmarks most of the time after adjusting for risk and fees . Despite the widespread underperformance of most actively managed funds, investors frequently receive calls from their financial advisors informing them of “attractive” or “fantastic” investment opportunities that are capable of beating the market. However, these opportunities often prove to be disappointing.
The truth is that investors are often not adequately informed about the concept of risk-adjusted returns and are frequently presented with investment products that have produced large gains over a relatively short period. Given that most investors are unable to objectively evaluate probability and risk, such presentations often lead them to chase returns and harm their investments.
While the concept of risk-adjusted returns, or evaluating investment gains in relation to risk, is not new, it is often not properly presented to investors by financial advisors. The average investor generally lacks the necessary framework for evaluating investment portfolios, and instruments properly.
Therefore, the purpose of this article is to present a simple framework to measure, evaluate, and compare the performance of an investment portfolio or investment fund. At Rockstead Capital, we also use this framework to objectively evaluate and improve the performance of our clients’ investment portfolios and in-house funds.
Based on the framework, a portfolio is considered superior if it has the following characteristics.
Portfolio produces high risk-adjusted benefits.
Portfolio generates returns with low correlation to financial markets.
Portfolio experiences low maximum drawdown.
Portfolio can recover quickly from losses when they occur.
Portfolio delivers stable and well-distributed positive returns.
When investors compare the performance of two investment portfolios, they should consider not only the returns produced by the investments but also the amount of risk taken to earn these returns.
The Sharpe Ratio is one of the most popular methods of adjusting investment return rates for risk. Originally referred to as the reward-to-variability ratio, the Sharpe Ratio was developed by William F. Sharpe in 1966 and revised in 1994 to become the formula used today.
The Sharpe ratio calculates the excess return (return above the risk-free rate) of an investment or portfolio per unit of its volatility or risk. The higher the ratio, the more an investor is rewarded for the risk that they are taking.
There are multiple ways to measure risk-adjusted returns, including Alpha, Beta, R-squared, etc. However, the goal of this article is not to discuss the mathematics and limitations of each metric. Rather, we seek to help investors understand that the naive approach of evaluating investment performance solely based on absolute returns may lead investors to invest in an inferior portfolio. In other words, a portfolio manager’s efforts to optimise their portfolio’s risk-adjusted returns are more relevant than their choice of risk-adjustment metrics.
Simply by observing the graphs below (without applying any mathematical formula), one can easily conclude that portfolio A is superior to portfolio B, even though the eventual outcomes (or absolute returns) of both hypothetical portfolios are the same.
Investors may want to note that the Sharpe ratio of the S&P 500 index from 1992 to 2022 is around 0.64. Generally, any investment portfolio that has a Sharpe ratio of 1 or greater is considered good. Our goal at Rockstead is to maximize the risk-adjusted returns (not merely absolute returns) of our investment portfolios. Investment portfolios that we typically construct for our family office clients often have Sharpe ratios as high as 2.
Asset correlation measures the movement of investments relative to one another. When assets move in the same direction at the same time, they are positively correlated. When one asset tends to move up while the other goes down, the two assets are negatively correlated.
The correlation between two investments can be measured using a statistic known as Pearson’s correlation coefficient, or simply the correlation coefficient. Mathematically, it is a statistical measure of how two variables move in relation to each other. This measure ranges from minus 1 to positive 1, where minus 1 indicates perfect negative correlation and positive 1 indicates perfect positive correlation.
In the context of the Rockstead Portfolio Construction Framework, we are interested in seeing how a portfolio correlates with various financial markets. One may ask, why is such correlation analysis important?
Simply put, an investment portfolio that has low correlation with the market offers protection to its investors, especially during economic downturns or times of global equity sell-offs.
One of the key objectives of the framework is to enable us to construct investment portfolios that are market-neutral. In other words, we favor portfolio returns that are independent of the direction of the market. This is achieved by taking long and short positions in a variety of assets to cancel out market exposure.
By cancelling out market exposure, a market-neutral portfolio is less exposed to market volatility and market risks. This can result in more stable and predictable returns over time. During market downturns, a market-neutral portfolio can also help investors preserve capital, making it an attractive investment for risk-averse investors.
SIZE OF EXTREME LOSSES
“Drawdown” is the percentage of decline from the highest point to the lowest point in an investment portfolio or fund. Measuring the maximum drawdown over a certain period is a practical way to quantify the downside risk of an investment portfolio or fund.
Drawdowns present significant risk to investors as the uptick in portfolio value needed to overcome a drawdown can be substantial. For instance, if a portfolio loses 1 percent, it only needs an increase of 1.01 percent to recover to its previous peak, which may not seem like much. However, a drawdown of 20 percent requires a 25 percent return to reach the old peak. During the 2008 to 2009 financial crisis, a 50 percent drawdown required a 100 percent increase to recover the former peak.
Limiting drawdown risk is crucial, and we extensively stress-test our portfolios. Our portfolio construction framework dictates that we don’t implement any investment portfolio that has a maximum drawdown of more than 15 percent during periods of extreme market downturn, such as the great financial crisis of 2008.
When considering the downside risk of a portfolio, it is imperative to not only consider the extent of drawdowns but also how long it takes for a drawdown to be recovered.
A 25 percent drawdown in one investment portfolio may take years to recover. On the other hand, another well-constructed portfolio may recover losses in a matter of months, pushing the portfolio to its peak value in a short period of time.
The unfortunate truth is that equity market declines of this magnitude, and worse, occur from time to time. There have been 11 occasions in the 148 years between 1871 and 2019 when equities (as measured by the S&P 500 Index) have destroyed at least 25 percent of value for investors (see table below). In the 2001 and 2008 downturns, losses exceeded 40 percent.
In the worst case, the Great Depression of the 1930s, investors lost over 80 percent of their money. It took over 15 years for them to recover their money if they remained invested.
 SPIVA (S&P Indices Versus Active) 2022 report produced by S&P Dow Jones Indices
As a growing number of Asian entrepreneurs, tycoons and affluent families prepare to hand over the reins of the business to the next generation, they are turning to family offices to facilitate succession planning and wealth transfer.
Today, a typical family office does more than just manage wealth; it also handles other issues such as tax and legal, succession and philanthropy. Many benefits can be derived from setting up a family office in Singapore.
The Benefits of Setting Up a Family Office in Singapore
One of the most important benefits is that a family office can be highly customised and structured to encompass your vision of the future, investment philosophy, and plan to protect human and intelligence capital. In other words, it is bespoke and personal.
Protects your privacy
A family office in Singapore, if structured correctly, can also protect the privacy of family members. Setting up a family office in Singapore allows a family to have all the personal information, such as family compasses, family charters, deeds of donations, shareholder agreements, deeds of incorporations, etc. in one secure place, accessible by only a limited number of people. The family office can therefore serve as the guardian and gatekeeper of the privacy of the family.
Ensures generational wealth perpetuity
Furthermore, wealthy families can take advantage of family office services in Singapore to ensure the continuity and perpetuity of their wealth. As family wealth is spread over several family members of different generations with different needs, it is crucial to strike a balance between wealth preservation and growth on the one hand and the financial needs of family members on the other hand. One cannot expect the family members individually to keep that balance. Hence, a family office provides a centralised and formalised approach to decision-making.
Improves family wealth governance
Finally, a family office in Singapore is set up to establish better governance of family wealth. Family wealth is getting more and more complex, especially in international settings. The family wealth usually grows beyond the ability and capacity of the family to manage it. In most cases, investments became the sole activity and business of the family. As a business on its own, it should be run professionally by a dedicated team of experts.
The Process Behind Setting Up a Family Office
Setting up a family office in Singapore can be a complicated process when there are multiple beneficiaries, and the assets are held by different entities and spread across several geographies. Many wealthy families also have members living in different parts of the world, adding to complexities since tax and inheritance laws differ from country to country.
Hence, the ideal country to establish a family office must have established regulatory rules, governing authorities, tax incentives scheme and a stable political environment to preserve a family’s wealth across generations.
Why Choose Singapore To Set Up a Family Office?
Over the past couple of years, Singapore has gained prominence as the preferred base for family offices. The city-state’s many strengths as a hub for family offices include a stable business and political environment, a strong rule of law, and a deep pool of financial, investment and wealth management talent. Below are some of the common reasons many ultra-wealthy families have chosen Singapore to set up their family offices.
How can Rockstead Capital Help?
Our dedicated Rockstead Family Office team, consisting of experienced portfolio managers, analysts, and operational, compliance and legal specialists, has accumulated extensive experiences in helping HNWIs establish family offices utilising the VCC structure.
Rockstead Capital owns a VCC, which allows us to manage the assets and investments of our family office clients through multiple sub-funds. Each family office client simply needs to register a sub-fund under the Rockstead VCC umbrella, which is a straightforward process that will be handled by our experienced onboarding team.
Depending on each family’s requirements, the family office fund structure could range from simple investment holding structures to complex arrangements involving multiple trusts, sub-trusts for individual beneficiaries, private trust companies, multiple funds, and complex asset classes, among others. In this paper, we will discuss two common structures, the Single Family Office (SFO) and Multi-family Office (MFO).
About Single Family Office in Singapore
There are estimated to be more than 700 Single Family Offices in Singapore and the number has grown in recent years. MAS did not have hard data on the scale of their operations because Single Family Offices in Singapore do not manage third-party monies and are therefore not registered with or licensed by MAS. However, industry research estimates that each Single Family Office typically manages assets of more than US$100 million, so total assets under management by Single Family Offices could be around US$20 billion.
Generally, the term “single family office” refers to an entity that manages assets for or on behalf of a family, and which is also wholly owned or controlled by the members of that same family.
A Typical Single Family Office (SFO) Structure
The typical Single Family Office structure includes an onshore or offshore Fund entity, which is managed by a Singapore-incorporated SFO company. The Single Family Office in Singapore company will provide investment management services to the Fund. It can also provide concierge and administrative services to the family.
Licensing Exemptions for Single Family Offices
Since the Single Family Office company is responsible for managing funds on behalf of a single family and not external parties, it can potentially qualify for CMS (Capital Markets Services) licensing exemption under the rules of the Monetary Authority of Singapore (MAS). In the structure diagram shown below, where the SFO company is held directly by the Fund entity, such exemption is applicable.
The choice of Fund entity is wide-ranging, and families can choose between onshore (Singapore) and offshore vehicles. Commonly used vehicles in Singapore include a private limited company, a limited partnership and the VCC (or Variable Capital Company), which we will discuss more in the next section.
Trust Structures for Single Family Offices in Singapore
Some families may incorporate trust structures on their family office platform. The use of trust provides several advantages and can be structured in such a way that it is not considered to be owned by a high-net-worth individual and does not form part of the estate of the individual when he or she passes away. Hence, the primary purposes for setting up a trust include succession and estate planning, the asset protection against creditors in the event of a marital breakdown, wealth planning, maintaining the confidentiality of asset information, ensuring continuity of the family business, and tax minimisation. In addition, a trust facilitates the process of transferring an estate after the settlor passes away whilst avoiding lengthy and potentially costly probate.
Trusts in Singapore are generally administered by either an institutional trustee or a private trust company.
Multi-Families Office (VCC)
The Multi-Families Office (VCC) structure was introduced to increase the international competitiveness of the fund industry in Singapore by encouraging funds to incorporate and operate in the country through a more flexible corporate structure. The VCC Act came into effect on 14 January 2020.
About Multi-Families Offices in Singapore
The VCC has the characteristics of a Singapore company because it is a separate legal person, but unlike a typical company, the VCC offers greater privacy as its financial statements are not required to be made public. The VCC also provides flexibility in the issuance and redemption of share capital. The VCC can use its capital/net assets to redeem shares and distribute dividends out of capital.
A Typical Multi-Families Office Structure in Singapore
The unique characteristics of the Singapore Multi-Families Office (VCC) structure offer multiple advantages to the multi-families office (MFO). The VCC can be established as an umbrella structure with multiple sub-funds and share classes. The umbrella VCC would have provisions for the segregation of assets and liabilities between sub-funds, such that the assets of one sub-fund may not be used to satisfy the liabilities of another sub-fund.
Sub-funds for Multi-Families Offices (VCC) in Singapore
Sub-funds may have different investment mandates and assigned beneficiaries. Such structure allows greater flexibility in segregating and allocating assets, differentiating investment objectives, and interest distribution arrangements between multiple families.
However, a licensed Singapore fund manager, such as Rockstead Capital, is required to manage the VCC. This means that single family offices are currently not able to access the advantages offered by a VCC structure.
Comparing a Family Office Setup with Rockstead Capital
Our team of experienced portfolio managers, analysts, and operational, compliance and legal specialists at Rockstead Capital is well positioned to help you navigate the complexity of creating a family office structure that encompasses your vision of the future, investment philosophy, and plan to protect human and intelligence capital.
Generally, our family office clients have the option to set up either a Single Family Office (SFO) or Multiple Family Office (MFO) under the VCC structure. Each option comes with associated benefits and limitations.
Establishing an MFO under the Rockstead Capital VCC umbrella requires no incorporation of a company entity or a Fund. The client only needs to register a VCC sub-fund, which is a straightforward and quick process. Since Rockstead Capital has been awarded the 13U tax exemption, MFO clients can enjoy tax exemption on their investment returns without the need to apply for any tax exemption scheme. These advantages mean that establishing an MFO under the Rockstead Capital VCC requires a significantly shorter timeframe (estimated 45 days). Furthermore, the MFO allows acceptance of investment funds from external investors, which essentially means the family office can, if they choose to, use the setup to operate an asset management business.
Singapore is recognised as a leading fund management hub in the world. Over the last decade, the government proactively took important steps to develop the country’s fund management sector and aggressively promote and enhance Singapore’s attractiveness in the global fund management industry.
In 2018, the Singapore Parliament passed the Variable Capital Companies Act 2018 (the “VCC Act”). The Act came into force in January 2020, when the Monetary Authority of Singapore announced the launch of the variable capital companies regulatory framework. The VCC Act provides for the incorporation and operational details of a new corporate vehicle that is suitable for investment funds.
The Singapore government created this new corporate structure to attract hedge funds and family offices that have their assets registered in low-tax jurisdictions such as the Cayman Islands. This was in response to the EU’s decision in February 2020 to add the Cayman Islands to its blacklist of non-cooperative tax jurisdictions.
The legislation is also designed to enhance Singapore’s position as a full-service international fund management companies and is expected to be a game-changer for Singapore’s asset and wealth management industry, cementing Singapore’s role in the region.
This article explains the key features of the VCC, the legal framework relating to the incorporation and establishment of a VCC, sets out the advantages of a VCC structure over other fund structures and provides an overview of the tax incentive scheme available under the VCC.
Understanding the VCC Umbrella and Sub-Funds
A VCC can be established as a standalone fund or an umbrella structure with multiple sub-funds and share classes. The umbrella VCC would have provisions for the segregation of assets and liabilities between sub-funds, such that the assets of one sub-fund may not be used to satisfy the liabilities of another sub-fund.
To address the key risk of cross-cell contagion within a VCC, any provisions (e.g. in the constitution or agreements entered into by VCCs) which are inconsistent with the segregation of assets and liabilities of sub-funds, would be void.
VCCs with multiple sub-funds must have the same fund manager for all the sub-funds under the umbrella fund. Furthermore, the winding up of the individual sub-funds does not automatically initiate the winding up of the entire umbrella fund.
A sub-fund of a VCC may invest in other sub-funds of the same VCC.
It is to be noted that the sub-fund is subject to the orders of the court as it would have been had the sub-fund been a separate legal person. The VCC may sue or be sued in respect of a particular sub-fund and may exercise the same rights of set-off in relation to that sub-fund as it may apply for a company incorporated under the Singapore Companies Act.
Key Features of VCC Further Explained
A VCC must be managed by a fund manager regulated or licenced by the MAS unless exempted. This exemption is only applicable to those financial institutions exempt under specific provisions of the SFA (securities and futures act) only.
The exemption means that those fund managers currently exempt from licensing and registration due to being a real estate fund cannot use a VCC.
However, this does not invalidate VCC’s use by a real estate fund manager or a single-family office in Singapore, if they find the use of VCC a compelling proposition, they can get themselves licensed and then launch a VCC.
The VCC is to be governed by a Board of Directors which will hold primary responsibility for the governance of the VCC.
It must have a minimum of one director who is ordinarily a resident of Singapore. The sole director can also be a sole shareholder of the VCC.
A VCC must have at least one director who is also a director or qualified representative of the fund management company that will be managing the VCC.
A VCC cannot have a body corporate as its director, irrespective of the residency of the said body corporate.
A VCC is required to safeguard its assets by entrusting a “custodian” unless exempted. The custodian must be an approved CIS trustee under the SFA. Such custodians must comply with the CIS Code, which will set out the operational obligations of custodians of the authorised scheme.
VCCs which comprise of restricted or exempt schemes that are PE/RE/VC funds may be exempted from requiring a custodian. To avail themselves of this exemption, the VCC must disclose the lack of a custodian to its investors, obtain investors’ acknowledgement of this custody arrangement, and ensure that the scheme is audited on an annual basis and that the auditor’s report is provided to investors.
Annual General Meetings
A VCC should host an annual general meeting every year within six months from the end of the financial year. The first financial year cannot be longer than 18 months (unless ACRA approves otherwise).
VCCs are not subjected to a mandatory requirement to hold an annual general meeting (AGM) and have the option to dispense with holding an annual general meeting by giving at least 60 days’ notice to its shareholders.
To prevent the abuse of VCCs for money laundering and terrorist financing:
AML/CFT requirements on VCCs will be supervised by the MAS for AML/CFT compliance
VCCs are required to outsource the performance of AML/CFT duties to its fund manager, are held ultimately responsible for compliance with its AML/ CFT requirements
VCC’s directors are subjected to fit and proper checks, and the VCC is required to have at least one director who is also a director of its fund manager
Understanding the Tax Incentive Scheme under VCC
A person in Singapore who manages a fund, whether offshore or onshore, on a discretionary basis creates a taxable presence for the fund in Singapore. In the absence of a tax treaty or tax incentive, income and gains of the fund due to the activities of a Singapore fund manager are potentially taxable in Singapore. However, Singapore’s domestic legislation provides for tax exemption for such funds.
Extension of Tax Exemption for VCCs
The tax exemption under section 13O referred to as “Singapore Resident Fund Scheme” or “SRF” and section 13U, referred to as “Enhanced-Tier Fund Scheme” or “ETF” of the Income Tax Act of Singapore will be extended to VCCs.
Singapore Resident Fund Scheme, 13O
The Singapore Resident Fund Scheme was introduced to encourage fund managers to base their fund vehicles in Singapore. The main advantage of using a Singapore fund over a tax haven-based fund is that the fund management company and investment team are based in the location of the fund itself (i.e. Singapore).
A Singapore resident fund managed by a Singapore-based fund manager will be exempt from tax on “specified income” derived from “designated investments” if the fund is an “approved company”. For a fund to qualify as an approved company, the fund vehicle must (amongst others) have the legal form of a company, have its control and management exercised in Singapore, and use a Singapore-based fund administrator. In addition to this, there is a business spending requirement of at least S$200,000 each financial year. There is no minimum fund size requirement.
The list of designated investments is broad, but a case-by-case analysis is needed. Some very clear exclusions are investments connected with Singapore real estate.
It is important to note that the fund cannot be fully owned by Singaporeans. If the investor is a non-qualifying investor (NQI) who beneficially owned more than the prescribed percentage stated in Section 13O, the investor shall be liable to pay a penalty to the Singapore tax authorities. The penalty is effectively equivalent to the corporate income tax payable on his share of the income and gains of the fund.
Enhanced-Tier Fund Scheme, 13U
Similar to the SRF Scheme, the ETF Scheme provides for tax exemption on “specified income” derived from “designated investments” from funds managed by a Singapore-based fund manager. Unlike the SRF Scheme, a fund does not have to be incorporated or resident in Singapore to apply for the ETF Scheme.
However, the conditions to apply for the ETF Scheme include a minimum fund size of S$50 million at the time of application, and the fund management company managing the fund to have at least three investment professionals. Additionally, there is a requirement for business spending of S$500,000 each financial year to be in Singapore. The ETF Scheme does not have restrictions on investors’ profiles and ownership percentages. The fund can reside either offshore or onshore.
A Singapore VCC is eligible for Enhanced-Tier Fund Scheme (if all conditions are fulfilled).
How can Rockstead Capital Help?
Our dedicated Rockstead Family Office team, consisting of experienced portfolio managers, analysts, and operational, compliance and legal specialists, has accumulated extensive experiences in helping HNWIs establish family offices utilising the VCC structure.
Rockstead Capital owns a VCC, which allows us to manage the assets and investments of our family office clients through multiple sub-funds. Each family office client simply needs to register a sub-fund under the Rockstead VCC umbrella, which is a straightforward process that will be handled by our experienced onboarding team.
After establishing the sub-fund, we will continue to support you in:
Investment portfolio analysis, construction, and implementation
Portfolio, risk management and operations (e.g., fund management and administration, subscription/ redemption, etc.)
Tax Incentives Schemes for Fund Management Companies in Singapore
The Singapore Resident Fund Scheme was introduced to encourage fund managers to base their fund vehicles in Singapore. The main advantage of using a Singapore fund over a tax haven-based fund is that the fund management company and investment team are based in the location of the fund itself (i.e., Singapore).
Eligibility for Fund Management Companies in Singapore
Both the SFO and VCC incorporated in Singapore are eligible to apply for the 13O – Onshore Fund Tax Exemption Scheme (formerly 13R) or the 13U – Enhanced Tier Fund Tax Exemption Scheme (formerly 13X), provided certain conditions are met.
Requirements for Family Offices in Singapore
An SFO or VCC is eligible to apply for 13O tax exemption if it can meet the following requirements
At least S$200k local business spending per year
Minimum fund size of S$10 million at the point of application; and within 2 years period, the fund must increase its AUM to S$20 millions
Must employ at least 2 investment professionals
Cannot be 100% owned by Singaporean Fund must be incorporated in Singapore
An SFO or VCC is eligible to apply for 13U tax exemption if it can meet the following requirements
At least S$500k local business spending per year
Minimum fund size of S$50 million at the point of application
Must employ at least 2 investment professionals. At least 1 of the investment professionals employed must be a non-family member