1. Stable growth in both jurisdictions

Both surveys confirm stable growth in the asset management industry in both jurisdictions. MAS and SFC observed double-digit increments in assets under management (AUM) despite challenging macro conditions. We also note a trend in onshore domiciliation and redomiciliation of fund vehicles, evidenced by the steady uptake of Singapore variable capital companies (VCCs) and a surge in the number of Hong Kong registered open-ended fund companies (OFCs). On the licensing front, both Singapore and Hong Kong recorded a steady increase in the number of firms licensed to carry out fund management activities and asset management activities (Type 9 regulated activity), respectively.

To us, this signifies the following:

• Resilience of net inflows: Each market attracted materially higher net subscriptions in 2024 (compared to the 2023 results), underscoring investors’ continued search for professional management and Asia-centric solutions.
• Growth and depth of talent: Singapore recorded a net increase in licensed fund management companies to 1,298, while personnel numbers in Hong Kong surpassed 53,000.
• Continued onshoring of new fund structures: The steady uptake of Singapore VCCs and surge in Hong Kong OFCs point to continued interest from market participants in onshore fund domiciliation.
  

2. Key similarities

Of particular was that cross-border capital remains the core component of both markets, with offshore investors accounting for the bulk of AUM and the majority of assets being deployed globally. Managers in both centres also demonstrated strong allocation capabilities outside their home jurisdictions.

• Offshore capital remains dominant: 77% of Singapore’s AUM was sourced from outside Singapore, and 63% of Hong Kong’s AUM was sourced from outside Hong Kong (54% excluding Mainland China).
• Global allocations: A significant share of AUM is invested globally, with 88% of Singapore-managed assets and 59% of Hong Kong-managed assets deployed outside their home markets.

3. Key divergences

While both centres saw robust growth, the underlying drivers differ materially. Singapore’s growth is broader based, fuelled by diverse global capital and a pronounced tilt towards alternative strategies and environmental, social, and governance (ESG) themes. Hong Kong’s momentum is inextricably linked to Mainland China-related capital flows and regulatory bridge programmes.

Geographical sources of capital flows: Singapore’s growth reflects a broader international appeal, while Hong Kong’s growth is increasingly tied to Mainland connectivity.

• Singapore’s growth is fuelled by global inflows, with 77% of total AUM sourced from outside Singapore and diversified across North America, Europe, and Asia.
• On the other hand, Hong Kong’s growth is driven primarily by Mainland-related inflows. Mainland-related firms’ AUM rose 15% to HK$3.09 trillion, with net inflows of HK$256 billion (a 68% increase). That said, it is important to note that Hong Kong still retains a fairly well-diversified global investor base as over 54% of its total AUM was sourced from investors outside Mainland China and Hong Kong.
• From a regulatory perspective, we also observe SFC’s focus on strengthening its connectivity to Mainland Chinese financial markets. Hong Kong is expanding Stock Connect exchange-traded fund (ETF) eligibility, relaxing restrictions on Mainland–Hong Kong Mutual Recognition of Funds (MRF), and rolling out WMC 2.0, the second iteration of the Cross-boundary Wealth Management Connect Scheme (WMC) in the Guangdong–Hong Kong–Macau Greater Bay Area, with the intention of boosting inflows from Mainland China.

Product mix: We also see Singapore positioning itself as Asia’s alternative investment hub, while Hong Kong maintains its breadth of multi-asset capabilities.

• Singapore’s growth is led by alternatives, with private equity, venture capital, hedge funds, and private credit driving a 14% increase in alternative AUM.
• Hong Kong maintains a balanced product mix between equities (41%), fixed income (29%), and other asset classes.

ESG penetration: In Singapore, MAS reported that 48% of AUM was managed with an ESG overlay, indicating a growing emphasis on the mainstreaming of ESG integration. On the flipside, ESG was not a focus in the Hong Kong survey.

4. Strategic takeaways for industry stakeholders

Portfolio construction and distribution: Managers targeting global capital or diversified investor bases should continue to consider Singapore as a pan-Asian hub, particularly for private markets or ESG-labelled mandates. Managers with Greater Bay Area or Mainland-oriented products may find Hong Kong connectivity channels (Stock Connect, MRF, WMC) increasingly attractive.

Product development: Singapore’s regulatory openness to private credit, secondaries, and ESG solutions suggests continued upside for specialised managers. Hong Kong opportunities include RMB-denominated offerings and further expansion of Stock Connect ETF eligibility.

Talent strategy: Tight labour markets and growth in the number of licensed fund management companies underscore the need for robust retention programmes and progressive remuneration structures, particularly for portfolio managers with global allocation expertise and alternatives experience.

5. Final thoughts

In our view, the results from the two surveys are promising. Singapore continues to strengthen its role as a diversified and globally connected asset management hub, while Hong Kong has consolidated its reputation as a gateway for Mainland capital and an offshore RMB centre. From a Singapore perspective, it remains critical to preserve investor diversity and avoid over-reliance on any single market. Looking ahead, we expect:

• Sustained inflows into both centres, albeit such inflows would be sensitive to macro-economic headwinds and geopolitical developments
• Continued product innovation, particularly in private credit, digital assets, and ESG-linked strategies
• Sharper regulatory focus on disclosure quality, operational resilience, and greenwashing risks

Client Alert 2025-277