Why more private capital fund managers are domiciling in Asia - JD Supra

Pragmatic fund structures and attractive tax and setup incentives are convincing an increasing number of private capital fund managers to domicile in Hong Kong and Singapore.

Asia is rapidly maturing as a market for alternative asset management by offering exposure to some of the world’s highest-growth, most innovative and most diverse economies. While the Cayman Islands and British Virgin Islands (BVI) are still the locations most fund managers choose to domicile their funds, many Asia-based managers are turning their attention closer to home.

The phenomenal growth we’ve seen in Asia-Pacific alternatives is only tipped to increase. Preqin forecasts Asia-Pacific private capital AUM to rise from USD1.7 trillion in 2020 to USD6.1tn by 2025, as the region quickly makes ground on the world’s largest alternatives market, North America.

New structures modelled on international best practice

Eager to tap into this growth Hong Kong and Singapore have introduced appealing new fund structures and tax incentives. These structures have been modelled on international best practice and are designed to attract private capital to their jurisdictions and enhance their positions as leading wealth and fund management centres.

Hong Kong’s Limited Partnership Fund (LPF) regime was introduced in 2020 and targets private equity funds, venture capital funds, real estate funds, buy-out funds and infrastructure funds. It offers no restriction on investment scope and is flexible in terms of capital...

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