Morgan Stanley, which already has substantial prime brokerage operations in Hong Kong and Tokyo, is setting up a complementary operation in Singapore to service the fast-growing number of hedge funds in the city-state.
Singapore and Hong Kong are now in completion to attract new hedge funds, with Singapore gaining ground. Morgan Stanley has been active in the Singapore alternative investment market since 1997. According to data provided by Eureka Hedge, Morgan Stanley is the country’s leading prime broker by assets under management. Eureka Hedge also says Asian funds are now running $140 billion in assets in all.
“With the growth evident in both Singapore-based start-up hedge funds, as well as with players entering the market from other countries, client proximity and on-the-ground support is clearly the right next step”, says Kurt Baker, head of Asian prime brokerage for Morgan Stanley.
The new Prime Brokerage office will open in Singapore later this year.
“Our clients are asking us to be closer to them,” adds Baker. “Their businesses are becoming increasingly sophisticated and complex, which is changing the model.”
Pasquale Rombola, Managing Director and Singapore Head of Institutional Equities Division, adds that the expansion of the prime broking capability in Singapore builds on investments Morgan Stanley has made in its institutional equities business in recent years. “Significant resources have been added in cash and derivative coverage of the ASEAN markets,” she says. “The division’s headcount has increased by 50% over the last 18 months and reflects the continuing growth of hedge fund and traditional fund activity emanating out of Singapore.”
Johnny Heng, Head of Global Equities Trading and Quantitative Equities at the Government of Singapore Investment Corporation, says Morgan Stanley’s plans to establish a prime brokerage team in Singapore “bears testimony to the healthy growth of the hedge fund industry here. This should give more reasons for new hedge funds to be started in Singapore now that they can have on-the-ground prime brokerage support and services.”