KAI SCHNEIDER ON THE SINGAPORE ADVANTAGE
Fund vehicles and asset management are the focus of our conversation with the head of Clifford Chance’s Funds and Investment Management group.
We meet Mr Kai Schneider nearly 10 months after the Monetary Authority of Singapore (MAS) launched its Variable Capital Companies (VCC) framework, which has been widely dubbed a “game-changer” for the Republic’s funds industry.
As the head of Clifford Chance’s Funds and Investment Management group, Mr Schneider keeps a close eye on developments like these—and he readily shares his observations with us. “By any measure, the launch of the VCC in Singapore has been a resounding success. It is unprecedented for a new vehicle to have this kind of uptake within its first year… as at 11 November, there were already 163 VCCs.”
Mr Schneider adds that the other fund vehicles available in the Republic, namely Singapore limited partnerships and unit trusts, are also necessary for the local funds industry. “Despite limited promotion, we have witnessed (the former) increasingly become the vehicle of choice for structuring large private investment funds with pan-Asia investment strategies. Meanwhile, unit trusts have been around longer than the limited partnership and are frequently used for retail funds and REITs.”
This understanding is one that Mr Schneider shares with others in the funds legal and tax advisory communities. But as he acknowledges, fund vehicles and how and when they should be used in structures is less widely understood outside this group. “As funds are a very specialised area of the law, only a limited group of lawyers have the specialist practical and commercial experience to understand the dynamics and intricacies of various vehicles (like the VCC) and their use in global structures,” he tells SAL. “In order to successfully advise clients on the structuring of funds, a lawyer needs more specialised experience than standard corporate legal training.”
Lawyers and the wider asset management industry—both in Singapore and beyond—can gain such experience from a webinar being held this week that looks at Singapore’s advantage when it comes to private fund structuring. It is helmed by Mr Schneider and features Ms Anulekha Samant, a tax partner at KPMG; Mr Long Jek Aun, who heads Simmons & Simmons JWS’ Singapore office and funds practice; Mr Joel Seow, director of Morgan Lewis Stamford; and Mr Jason Eng, General Counsel and Chief Compliance Officer of Dymon Asia Group.
“The webinar will examine the fund vehicle options in Singapore,” explains Mr Schneider. “It is important to remember that different types of investment funds lend themselves to different structures and vehicles, depending on factors like the target investors and investment strategy of the investment fund.”
As we end the interview, I ask Mr Schneider about what he thinks is Singapore’s advantage when it comes to private funds. The first, he notes, is a global trend towards onshore jurisdictions. “These are typically tax advantageous jurisdictions with a network of double taxation treaties where the fund manager is located,” he explains, adding that the Singapore landscape is also an important factor. “The presence of highly skilled professionals and experienced service providers, a stable and business-friendly environment, robust legal framework, extensive double taxation treaty network and a pragmatic regulator in the MAS make it an excellent, well-rounded jurisdiction for international sponsors to domicile their funds and managers, especially if they are pursuing pan-Asia investment strategies.”
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