A hedge fund in Singapore is a private, actively managed investment fund that uses sophisticated strategies — including leverage, short-selling, and derivatives — to generate absolute returns regardless of market direction. Singapore hedge funds are regulated by MAS and are generally only accessible to accredited or institutional investors. This article is informational only and does not constitute financial advice.
Singapore is Asia’s third-largest hedge fund hub after Hong Kong and Tokyo. The city-state’s favourable tax treatment, strong legal system, and proximity to Southeast Asian markets have attracted significant global hedge fund capital. As at Q1 2026, Singapore manages an estimated USD 100+ billion in hedge fund assets through MAS-licensed fund managers.
Table of Contents
- What Is a Hedge Fund?
- Hedge Fund Strategies Used in Singapore
- MAS Regulation of Hedge Funds
- Fee Structure: 2-and-20
- Hedge Funds vs Unit Trusts vs ETFs
- How to Access Hedge Funds in Singapore
- FAQ
What Is a Hedge Fund?
Unlike mutual funds or unit trusts that aim to track or beat a benchmark, hedge funds target positive absolute returns — meaning they aim to make money whether markets are rising or falling. They achieve this through a range of strategies not permitted in standard retail funds, including short-selling securities, using derivatives for leverage, and concentrated bets on individual securities or macro themes.
The term “hedge” originally referred to hedging market risk — but modern hedge funds range from truly market-neutral strategies to highly directional macro bets. The common thread is that they operate with far fewer regulatory constraints than retail funds.
Hedge Fund Strategies Used in Singapore
Long/Short Equity: The fund buys stocks expected to rise and short-sells stocks expected to fall. Many Singapore-based managers focus on Asia-Pacific equities including Singapore, Hong Kong, and Southeast Asian markets.
Global Macro: Large directional bets on currencies, interest rates, and commodities based on macroeconomic analysis. Singapore’s position as a forex hub makes it a natural base for macro funds — the Singapore Dollar (SGD) and regional EM currencies are common macro themes.
Relative Value/Arbitrage: Exploiting price discrepancies between related securities, such as the spread between S-REIT units and their net asset value, or pricing anomalies in SGX futures vs underlying stocks.
Multi-Strategy: Combining several approaches in a single fund to reduce strategy concentration risk.
MAS Regulation of Hedge Funds
Hedge funds in Singapore are regulated under the Securities and Futures Act (SFA). Fund managers must hold a Capital Markets Services (CMS) licence from MAS for fund management. Small managers with less than SGD 250 million in AUM and fewer than 30 qualified investors may apply for a Registered Fund Management Company (RFMC) licence, which has lighter requirements. Larger managers need a Licensed Fund Management Company (LFMC) licence.
Hedge funds structured as Variable Capital Companies (VCCs) — a Singapore-specific corporate structure introduced in 2020 — benefit from ring-fencing of assets and liabilities across sub-funds, making them attractive for multi-strategy managers. As at Q1 2026, over 1,000 VCCs have been incorporated in Singapore since the framework launched.
Fee Structure: 2-and-20
The traditional hedge fund fee structure is “2-and-20”: a 2% annual management fee on assets under management plus a 20% performance fee on profits above a hurdle rate. In Singapore, fee pressure has reduced this — many managers now charge 1–1.5% management and 15–20% performance. High-water marks are standard — the fund must recover past losses before collecting performance fees again.
Hedge Funds vs Unit Trusts vs ETFs
Unit trusts in Singapore are retail-accessible, MAS-authorised funds with strict investment guidelines. ETFs are listed on SGX and track indices passively. Hedge funds are unlisted, lightly regulated for accredited investors, and use active strategies. Liquidity is a major difference — ETFs trade continuously; many hedge funds have quarterly redemption windows and lock-up periods of 1–2 years.
For most Singapore retail investors, the right approach is ETFs and unit trusts via platforms like Endowus or Syfe. See our robo advisor guide and unit trust explainer.
How to Access Hedge Funds in Singapore
Accredited individual investors (net assets ≥ SGD 2 million or income ≥ SGD 300,000) can access hedge funds through private banks (DBS Private Bank, OCBC Premier, UOB Private), family offices, or direct fund subscriptions. Minimum investments typically start at USD 100,000–500,000. Retail investors cannot directly invest in Singapore-regulated hedge funds but may gain indirect exposure through listed fund-of-funds or structured products.