Singapore  Singapore

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Listing Id: 25434 Last Refreshed: 30/05/2022 Total Views: 490

(Expired)Partnership/Investment/Acquisition Opportunity In Licensed Investment Firm

Central AreaFinancial Services
Asking Price: > S$5M
Business For Takeover
Look For Investor
Look For Partner
  • Premise Type Commercial Street Premise Size N/A
  • Monthly Rental N/A Rental Desposit N/A
  • Revenue N/A Liability N/A
  • Gross Profit N/A Net Profit N/A
  • Stock N/A FFE N/A
  • Payable N/A Receivable N/A
  • Owner Role Full Time Staff N/A
  • Established N/A Source Direct Seller
  • * Revenue, Gross Profit, Net Profit, Cash Flow are based on Monthly average
Peter Tan

Reason For Sale

The company is looking for a long-term strategic partner/investor/acquiror to tackle growing investment opportunities in technology sector globally together.

Description

1. Summary
- Holds a Capital Markets Services Licence from the Monetary Authority of Singapore.
— Currently, the company has not yet accepted any assets into investment and has a clean slate to create investment vehicles of choice.

— The company is looking for a long-term strategic partner to tackle growing opportunity in technology sector globally together.


2. Licensed Activities
— To invest at least 80% of capital in specified products that are directly issued by an unlisted business venture that has been incorporated for no more than ten years at the time of initial investment. Any follow-on investment in such qualifying investments will remain as qualifying
— To invest up to 20% of capital in other unlisted business ventures that do not meet sub-criterion
— A VCFM’s funds can only make investments (qualifying or otherwise) in unlisted assets. The funds cannot invest in listed securities or initial public offerings. However, this does not preclude a VCFM’s funds from holding listed securities in portfolio companies, provided that the fund had acquired these securities prior to their listing.

Looking ahead
Southeast Asia is widely acknowledged as the world’s next growth engine after China. It is reported that the Association of Southeast Asian Nations, made up of 10 member states, is projected to continue on its growth trajectory to become the fourth-largest economy in the world by 2025, behind the US, China and Japan.
Key trends impacting the asset management industry
Singapore as the most-preferred offshore wealth management hub
Singapore is widely regarded to become one of the world’s largest wealth hubs in the next few years. It is a destination of choice due to a strong banking sector and progressive legal and regulatory systems, which help to continually boost Singapore’s asset management ecosystem.5
According to Knight Frank’s Wealth Report 2021, Asia-Pacific’s population of ultra-high-net-worth individuals is predicted to grow by a third in the next five years – much faster than the global average. Singapore is expected to be the ideal base to meet the needs of the growing offshore asset pools estimated at US$1.48 trillion by 2023.6
Singapore’s investment fund vehicle – VCC, a game changer?
One of the more widely talked-about tools to help boost the private funds industry is Singapore’s new corporate structure for investment funds known as the Variable Capital Company (VCC). This came into force in 2020 and is touted as a “game-changer”.
So far, it has lived up to that hype. According to MAS, the VCC has seen strong industry adoption, with close to 200 set up in its first year, for a diverse range of traditional and alternative investment strategies.7
With the VCC, the Singapore government hopes to attract more funds to be domiciled and managed from Singapore, thereby creating more opportunities for the players in the country’s funds ecosystem and strengthening Singapore’s position as the Asian hub for fund domiciliation and management.
To encourage industry adoption of the VCC framework in Singapore, MAS launched the Variable Capital Companies Grant Scheme, which will help to defray the costs involved in incorporating or registering a VCC by co-funding up to 70% of eligible expenses paid to Singapore-based service providers for a period of three years. The grant is capped at S$150,000 for each application, with a maximum of three VCCs per fund manager.
The VCC has found favour with fund managers operating different investment strategies such as hedge funds, venture capital funds and private equity funds. It has also drawn many wealth management players, keen to establish fund platforms for their high-net-worth clients, and family offices.
What makes the VCC attractive as a fund vehicle?
The VCC functions as a corporate structure tailored specifically for investment funds. More specifically, it is incorporated under the VCC Act, instead of the Companies Act, to allow it to function as a fund vehicle instead of as a generic corporate entity. Despite being administered by Singapore’s corporate regulator, the Accounting and Corporate Regulatory Authority (ACRA), and unlike other companies registered with ACRA, the VCC’s register of shareholders is not made public.
In addition to the grant mentioned above, there are numerous tax incentives offered to a VCC. These include, in particular, tax incentives under Section 13R (Singapore Resident Fund) and Section 13X (Enhanced Tier Fund) of the Singapore Income Tax Act. In effect, for eligible funds, all income from designated investments will be tax free, resulting in no tax outcome, similar to that of a Cayman fund.
The Section 13R scheme exempts specified income received by an approved company in Singapore from tax, where such income is derived from designated investments in funds managed in Singapore by a licensed or exempt resident fund manager. It will not be applicable if all of the approved Singapore companies’ issued securities are beneficially owned by Singapore persons. The fund must incur at least S$200,000 a year in global business expenses and the fund’s administrator must be based in Singapore.
The Section 13X scheme applies to funds with a minimum size of S$50 million that are managed or advised by a Singapore fund manager, which can be an exempted Singapore family office or a licensed multi-family office. The family office must employ at least three investment professionals in Singapore who are substantively engaged in an investment management or advisory role, and the fund must incur at least S$200,000 in business spending in Singapore, which typically covers investment management fees payable to the family office.
In addition, a VCC will have the flexibility to issue and redeem shares without having to seek shareholders’ approval. This allows investors to exit their investments in the investment fund when they so wish, and pay dividends using its capital. This is in contrast to the company structure that has restrictions on capital reduction and can only pay dividends out of profits.
More broadly, the VCC may be established as a standalone fund or as an umbrella fund with multiple sub-funds. The umbrella with sub-funds structure creates economies of scale. Each sub-fund can share a common board of directors and use the same service providers, including the same fund manager, custodian, auditor and administrative agent. As a safeguard for the VCC shareholders and to enhance creditor protection, the assets and liabilities of each sub-fund will be ring-fenced from other sub-funds.
The VCC will allow for a wider scope of accounting standards to be used in preparing financial statements, which helps to serve the needs of global investors. Apart from Singapore accounting standards and recommended accounting principles, International Financial Reporting Standards and US Generally Accepted Accounting Principles can be used by VCCs.
Looking ahead, it has been reported that MAS is in the process of revising its VCC fund structure to expand the pool of fund managers that can use the scheme, and to make fund conversions and multiple offshore fund redomiciliation easier. MAS is keen to expand the reach of the scheme further in order to attract more asset managers to launch new funds using the new vehicle.
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