Key Takeaways
Fund management is the professional administration of investments on behalf of clients or institutions within structured, regulated frameworks. Singapore has emerged as a leading hub for fund management due to its well-regulated environment under the Monetary Authority of Singapore (MAS) and attractive tax incentives.
In 2025, the Singapore fund management industry primarily operates through three categories of fund management companies: A/I Licensed Fund Management Companies (A/I LFMCs), Retail Licensed Fund Management Companies, and Venture Capital Fund Managers (VCFMs). Each category has distinct licensing requirements, compliance regulations, operational responsibilities, and legalities.
Proper licensing, fund structuring, and compliance with requirements are mandatory for all fund management companies in Singapore. Fund management fees vary depending on the type of fund, the complexity of management, and fund performance. Top fund management companies often charge a combination of fixed management fees and performance-based commissions to high-profile clients.
Companies such as Lanturn provide comprehensive support to fund managers and investors, including fund formation, fund administration, fundraising, capital calls, bank recons, financial statement distribution, new investments, portfolio monitoring, statutory filings, KYC & AML processes, and ongoing MAS compliance reporting.
Estimated reading time: 10-11 minutes
What is Fund Management?
Definition of Fund Management and How It Works
Fund management is the professional process of overseeing and managing investment portfolios on behalf of clients. It aims to achieve specific investment objectives, such as long-term growth, income generation, or capital preservation. Fund managers make decisions about where to invest, allocate assets across equities, bonds, derivatives, and other financial instruments, and manage risks associated with investments.
In Singapore, fund management companies operate under strict regulatory oversight from MAS, ensuring transparency, investor protection, and ethical operations.
Difference Between Fund Management and Asset Management
Although often used interchangeably, fund management and asset management have subtle differences:
- Fund Management: Focuses on pooled investment vehicles, such as mutual funds, hedge funds, or private equity funds. Managers actively make investment decisions and manage risk within these pooled funds.
- Asset Management: A broader concept, which may include managing individual portfolios, institutional investments, or wealth management services. Asset managers may or may not operate pooled funds.
Key Objectives and Functions of Fund Managers
The main objectives and responsibilities of fund managers in Singapore include:
- Investment Strategy: Designing investment approaches aligned with client objectives.
- Portfolio Construction: Allocating assets across multiple instruments to maximise returns and reduce risks.
- Risk Management: Monitoring and managing financial, operational, and market risks.
- Compliance and Reporting: Ensuring adherence to MAS regulations and providing regular updates to investors.
- Fund Services: Overseeing the day-to-day operations of funds, including investment administration, custodian relationships, and performance tracking.
Why Singapore is a Global Hub for Fund Management
Role of the Monetary Authority of Singapore (MAS)
MAS, Singapore’s central bank and financial regulator, plays a pivotal role in the fund management industry. It oversees licensing, monitors fund operations, and sets regulatory standards that uphold investor confidence. MAS also promotes innovation in financial services, making Singapore one of the most trusted jurisdictions for global investors.
Tax Incentives for Fund Management Companies
Singapore provides multiple tax benefits for fund management companies, such as exemptions on specified income for approved funds under the Section 13O and 13U schemes.. These incentives reduce tax obligations for fund managers and investors, increasing the lure of establishing a fund management company in Singapore.
Overview of Singapore’s Regulatory Framework
The Singapore regulatory landscape for fund management is straightforward and robust. Key elements include:
- Licensing under the Securities and Futures Act (SFA).
- Mandatory compliance with MAS Notice SFA04-N02 and maintain robust procedures for customer due diligence (Know Your Customer (KYC), ongoing monitoring, AML regulations and suspicious transaction reporting.
- Reporting requirements and regulatory oversight to protect investors.
- Fund administration standards for transparency and operational efficiency.
- Compliance and risk management frameworks.
- Code of Conduct and Investor Protection.
- Fit and Proper requirements. Key individuals and shareholders must meet MAS’s Fit and Proper Criteria (integrity, competence, financial soundness).
Growth of the Fund Management Industry
The Singapore fund management sector has experienced significant growth, driven by global investor interest and increasing cross-border capital flows. Singapore’s AUM grew by 12% to SGD 6.1 trillion in tandem with global AUM growth in 2024. The expansion of fund management activities, including portfolio management, advisory services, and private equity investment, has cemented Singapore’s position as a global fund management hub.
Types of Fund Management Companies in Singapore
A/I LFMCs (Accredited/Institutional Licensed Fund Management Companies)
A/I LFMCs manage assets for accredited/institutional investors. Although a Capital Markets Services (CMS) license is required, these funds operate under less stringent requirements than retail LFMCs, with a minimum capital requirement of SGD 250,000.
Retail Licensed Fund Management Companies
Retail LFMCs manage funds for retail, accredited, and institutional investors with stricter compliance requirements and minimum capital requirements of SGD 500,000 (if not offering CIS to retail clients), or SGD 1,000,000 (if offering CIS to retail clients).
Venture Capital Fund Managers (VCFMs)
VCFMs manage venture capital funds, focusing on start-ups and early-stage companies. MAS provides a streamlined licensing process for VCFMs to encourage innovation while ensuring investor protection.
Differences Between Each Fund Type and Their Requirements
Differences Between A/I LFMCs and Retail LFMCs
Feature | A/I LFMCs | Retail LFMCs |
Client Base | Only accredited and institutional investors | Retail, accredited, and institutional investors |
Capital Requirement | At least SGD 250,000 base capital; must maintain 120% of risk-based capital adequacy | SGD 500,000 (non-CIS) or SGD 1,000,000 (if offering CIS to retail clients); 120% of risk requirement |
Licensing Standards | Capital Markets Services (CMS) license required; slightly less stringent than retail LFMC | CMS license required; higher regulatory and operational standards; stricter vetting |
Compliance Function | Independent compliance required if AUM ≥ SGD 1b; less stringent otherwise | Independent compliance function required regardless of AUM; ongoing compliance monitoring |
Staff Requirements | At least 2 directors (5+ years experience) CEO – 5 years experience Director – At least 2 with 5 years of experience Relevant Professional – At least 2 with 5 years of experience Full-time representative – at least 2 Singapore-based | CEO (10+ years experience), 3 Singapore-based representatives, 2 directors (5+ years experience) |
Product scope | No restriction on product types or AUM | No restriction on product types or AUM |
Insurance | Professional Indemnity Insurance (PII) not mandatory unless required by MAS or client base demands it | Professional Indemnity Insurance (PII) required |
Internal Audit | Required; can be via in-house team, parent HQ, or third party | Required; similar internal audit expectations as A/I LFMCs |
Track Record | Not mandatory, but beneficial | 5-year retail fund management track record required if licensed for CIS retail investors |
Fund Management Process in Singapore
How Funds Are Structured and Operated
Funds in Singapore are commonly structured as Variable Capital Companies (VCCs), unit trusts, or limited partnerships. Fund managers determine fund objectives, structure the investment portfolio, and implement operational frameworks to manage risk and performance. Incorporation services are essential for establishing the legal entity and ensuring compliance from inception.
Role of Fund Managers, Custodians, and Trustees
- Fund Managers: Oversee investment decisions and the fund’s overall strategy.
- Custodians: Safeguard the fund’s assets and ensure accurate record-keeping.
- Trustees: Provide independent oversight to ensure compliance with regulatory responsibilities.
Compliance and Reporting Under MAS Regulations
Fund managers in Singapore must adhere to MAS requirements, including:
- Regular reporting of fund performance and financial statements.
- Compliance with KYC & AML processes to prevent money laundering and terrorist financing.
- Risk management and governance disclosures.
- Annual audits and independent reviews.
Example of a Typical Fund Lifecycle
- Incorporation: Establish the fund entity with MAS approval.
- Fundraising: Raise capital from investors.
- Portfolio Management: Allocate assets and monitor investments.
- Reporting and Compliance: Submit financial statements and regulatory reports.
- Fund Exit or Continuation: Redeem units, exit investments, or launch a new fund cycle.
Key Licensing Requirements for Fund Management Companies
Eligibility Criteria for Fund Managers
Applicants for a fund management company in Singapore must demonstrate:
- Professional qualifications and relevant experience.
- Adequate financial resources and capital.
- A clean regulatory and criminal record.
- Proper internal controls, risk management, and governance policies.
Steps to Obtain a Fund Management License (MAS Approval Process)
- Submit a comprehensive application to MAS.
- Include business plans, risk management frameworks, and governance structures.
- Demonstrate compliance with KYC and AML processes.
- MAS conducts a detailed assessment and grants approval if criteria are met.
Documents Required and Compliance Timelines
Key documents include:
- Business plan
- Audited financial statements and capital proof.
- Projected financial position of the company
- Certificate of incorporation from ACRA
- Auditor’s details
- Background checks of directors and key personnel.
- Fund management policies, including risk management and compliance manuals.
MAS approval typically takes 3 to 6 months, depending on the complexity of the fund structure and the type of fund management company.
How to Maintain License Compliance
Maintaining compliance involves:
- Regular fund administration services, including accounting, reporting, and risk oversight.
- Annual audits and periodic MAS submissions.
- Continuous adherence to KYC & AML processes and corporate governance standards.
Fund Management Fees and Cost Structure
Common Fund Management Fees and Commissions
Fund managers typically earn revenue through a combination of:
- Management Fees: A fixed percentage of assets under management (usually 1-2%).
- Performance Fees: Incentive-based fees, often 10-20% of fund profits.
- Operational Fees: Custodian, administration, and regulatory costs.
Factors Influencing Management Fees
- Fund size and complexity.
- Type of investment strategy (equity, fixed income, hedge fund, venture capital).
- Reputation and track record of fund managers.
Fee Structure Examples from Top Fund Management Companies
The top fund management companies may charge:
- LFMCs: 1.5% management fee + 15% performance fee.
- RFMCs: 0.75-1% management fee + lower performance fees.
Such fees reflect the fund management process, expertise, operational scale, and the complexity of the fund structure.
Advantages of Setting Up a Fund in Singapore
Strategic Location and Global Access
Singapore serves as a gateway to Asia-Pacific markets, and provides the most conducive landscape to fund managers to high-growth economies in Southeast Asia, China, and India.
Regulatory Support and Investor Confidence
MAS regulations create a transparent and secure investment environment, enhancing investor trust and global credibility.
Access to the Variable Capital Company (VCC) Framework
VCCs provide flexible capital management, allowing fund units to be issued or redeemed without impacting fund capital. This structure simplifies fund administration services and operational efficiency.
Tax Incentives for Funds and Managers
Tax exemptions under MAS-approved schemes enhance profitability and international competitiveness. Fund managers benefit from lower tax burdens, making Singapore an attractive jurisdiction for fund setup.
How Lanturn Helps You With Fund Management
Fund Formation, Structuring, and Administration Services
Lanturn supports fund managers with fund services, including incorporation, structuring, and operational administration. This ensures compliance with local regulations from the outset. If you need a license, we work with you to assemble the information necessary to submit and track license applications; we do the heavy lifting, so you don’t have to.
KYC and AML
Lanturn provides robust Know Your Customer (KYC) and AML process services, mitigating compliance risks for both fund managers and investors.
Compliance, Accounting, and MAS Reporting
Through corporate accounting and regulatory reporting support, Lanturn ensures ongoing compliance with MAS regulations, including timely submission of financial and performance reports.
Why Lanturn is Trusted by Fund Managers in Singapore
With deep expertise in fund management Singapore, Lanturn has become a trusted partner for both local and international fund managers seeking streamlined operations, regulatory compliance, and high-quality fund administration services. Our platform helps streamline everything from fundraising, capital calls, bank recons, and financial statement distribution, to new investments, portfolio monitoring, and statutory filings. Aside from saving you time, our platform also lets you generate KPIs and reports on demand, or you can instruct us to help you with this.
Talk to Lanturn’s fund specialists today for seamless fund services and fund administration services.
FAQs
What is Fund Management in Singapore?
Fund management is the professional oversight and strategic management of investment portfolios on behalf of clients under MAS-regulated frameworks, ensuring intelligent investment, risk management, and compliance.
How Do I Start a Fund Management Company in Singapore?
To start a fund management company in Singapore, choose the fund type (A/I LFMC, retail LFMC, or VCFM), meet MAS eligibility requirements, prepare business and compliance plans, and obtain MAS registration or licensing. You can talk to Lanturn’s experts to experience top-of-the-notch fund services and fund administration services.
What Are the Benefits of Setting Up a Fund in Singapore?
Benefits include regulatory support, tax incentives, investor confidence, strategic location, and access to flexible fund structures like VCCs.
What Are the Fund Management License Requirements?
Requirements include minimum capital, qualified personnel (director experience), compliance frameworks, and adherence to MAS rules and fund management activities.
How Much Does It Cost to Set Up a Fund Management Firm?
Costs depend on fund type and scale but generally include licensing fees, operational expenses, capital requirements, and professional services like Lanturn. RFMC setup costs are lower, while LFMCs incur higher regulatory and operational costs.
What Are the Different Fund Management Activities Under MAS?
Fund management activities include portfolio management, investment advisory, fund administration, risk management, and regulatory compliance.
Who Are the Best Fund Managers in Singapore?
The best fund managers in Singapore are typically LFMCs and experienced VCFMs with proven track records in investment performance and regulatory compliance.
What is the Role of MAS in Fund Management?
MAS regulates licensing, supervises fund operations, enforces compliance, and ensures investor protection, promoting Singapore as a global fund management hub.
Can a Foreign Company Set Up a Fund Management Business in Singapore?
Yes, foreign companies can establish a fund management business in Singapore provided they meet MAS licensing requirements (depending on whether the company plans to manage funds for all types of investors or just qualified investors). The foreign company can set up a Singaporean entity, such as a VCC, to manage funds based in Singapore. Existing foreign funds can also convert to a VCC or incorporate one in Singapore.
