Editor's comment: This article focuses on Singapore's growing reputation as a global wealth management centre. To view the other side of this argument, focusing on the challenges of operating in the region, click here.

Singapore is rapidly cementing its reputation as a reliable global wealth management centre, although challenges abound, according to a panel of Asia-based experts at a roundtable hosted by Opalesque, the alternative investment publication.

Global players like Tudor, Fortress and Bluecrest have expanded their local presence in Singapore and view Asia as a unique market set with many interesting investment opportunities, where many different strategies across various business units can be applied.

Increasingly, international family offices are opening offices in the city-state to establish a safe hub for the family assets and its related management. Compared to ten or even five years ago, Singapore today offers a strong ecosystem for alternative investment managers with around 30 fund administrators based in the city-state.

At the roundtable in Singapore last month, the issues surrounding the migration of family offices and other institutions were discussed by a panel of industry experts.

One panelist was Roxanne Davies, the managing director of Parly Singapore, the Asian division of a European family office, which in August set up in Singapore. She said that the family she represents decided a presence in Singapore would be important from a diversification perspective, not only to benefit from the flow of information across all Asian markets, but also, to establish a safe hub for the family assets and its related management.

She added: “Singapore has made an excellent case to be the new hub for wealth management. This is a very well-run country, with a highly intelligent leadership, following a very pragmatic approach to business and to growth.”

Meanwhile Guan Ong, principal of Singapore-based Blue Rice Investment Management, a recent Asia credit fund start-up, pointed out that although Asian markets are generally smaller and more fragmented than Pan-European or US markets, the liquidity and size of all of the individual Asian markets have grown remarkably over the past five to ten years, and will continue to grow.

“There are already many managers in Asia who deploy all kind of strategies from Asia, investing into and outside the region. The growth has been quite broad based, spanning from the different Asian asset classes, the types of instruments traded, the technology used and the different service providers, the exchanges, the wealth managers, and so on. Singapore and Hong Kong have been the main centers where the growth is clearly evident," he said.

Singapore's development as a financial hub will hinge on domestic investment. Although over half of global foreign exchange reserves belong to Asian countries, most of these assets in the past have been managed in developed countries, Lee Ka Shao, chief investment officer at Cavenagh Capital, pointed out.

“While a lot of money is invested in Asia, a good amount of it is actually recycled money - meaning that the funds were created through excess savings in Asia,” he said. “Those funds were then channelled out to Western institutions, who reinvest them back into Asia. It is likely that in the near future this circle will change and more Asian savings at the individual, institutional and sovereign levels, will be directly invested into Asia through Asian funds.”

He added that Asian sovereign wealth funds have been asked to help kick-start funding and ease the start-up challenges of hedge funds in Asia. In the past, potential investors perceived a lack of talent or experience, but these days, new managers tend to be traders from the global investment banks, sovereign wealth funds or other larger hedge funds, with years of experience and solid track record.

“The talent pool has matured, and has been recognised by international investors who continue to allocate to Asian managers,” he added.