The pandemic, as we now know, defied all expectations. It spread at an alarming rate and had a devastating impact on people, along with most, if not all economies, with many going into - or facing - the prospect of a recession.
In many ways, the VCC has also defied expectations, with its adoption going from strength to strength and confirming that a new structure was a long awaited by the industry. Looking back over the last two-and-a-half years, most industry experts agree it has been a game changer for the asset and wealth management industry within Singapore, but also across the APAC region.
It has sparked a significant increase in investment flows coming into the city-state and has helped to propel it firmly onto the global stage as a destination of choice for many fund managers and family offices (aspiring transformation to fund management). Singapore’s central bank announced back in November last year that more than 400 VCCs had been set up, a figure that will no doubt have risen further since then. Australian and Chinese managers have topped the list of those that have ‘flocked’ to Singapore within APAC, while the UK has led the charge among European investors, along with a good number of US managers as well.
What’s the appeal?
Its flexibility, compartmentalization, asset class agnosticism and speed to launch are among the many advantages that the industry has cited as driving the VCC’s stand-out appeal.
It would be a stretch to say that the trend is purely down to the VCC alone. The ecosystem that goes with it and the open architectural set up of the funds industry in Singapore, which very much includes a willingness to evolve and continue to make things even more attractive, are key factors in that success.
The adoption of the VCC is equally strong within the various sub-classes of the sector - Venture Capital, Hedge Funds (including long-only) and a mix of VCC with Private Equity LP structure.
