Key roles for a Singapore hedge fund
Singapore’s hedge fund landscape
Before you start planning how to set up a hedge fund in Singapore, let’s take a look at the basics.
By definition, a hedge fund is an investment vehicle that pools capital from accredited or institutional investors to generate returns through a diverse range of strategies.
Miki Doan, Practice Manager and Specialised Financial Services Consultant at Robert Half Singapore, says hedge funds are compelling for many reasons.
“Compared to traditional investment funds, hedge funds are fairly unique – they have the flexibility to invest in a wide variety of companies, structures, and asset classes, both listed and unlisted,” she says.
“Hedge funds seek to maximise returns while minimising risk – they are generally managed by professional fund managers and are subject to fewer regulations than mutual funds, allowing for more innovative and aggressive investment approaches.”
“Combined with Singapore’s business-centric environment, robust regulatory framework and attractive tax incentives, Singapore hedge funds offer excellent opportunities for investment managers,” says Miki.
How to set up a hedge fund in Singapore
If you’re looking to tap into Asia’s growing wealth, setting up a hedge fund could be the answer.
Don’t be fooled – it takes more than just a sound investment strategy to start and operate a hedge fund.
Miki says assembling the right team is critical.
“If you’re wondering how to set up a hedge fund, don’t discount the power of people. Sure, you might have a winning investment strategy or healthy capital, but the right talent matters. In my experience, qualified talent is the key to thriving in this competitive industry,” she says.
“Recruiting a skilled local team that understands the market is crucial for hedge fund success and sustainability. Ultimately, the right team, with diverse experience and expertise, will have the right capabilities to execute, manage and support the fund's operations. Not to mention, a local team will have familiarity with Singapore’s regulatory environment, market conditions, and investor preferences. That’s exactly what you need to sharpen your edge in this industry,” Miki says.
Let’s take a look at the key professionals that you’ll need when starting a hedge fund in Singapore.
Fund Manager
As the primary decision-maker responsible for the fund's investment strategy and portfolio management, a Fund Manager works to generate positive returns for its investors.
Their role requires a combination of financial analysis, strategic decision-making and risk management.
Key responsibilities include:
Developing and implementing investment strategies.
Staying abreast of global financial markets and economic trends.
Allocating the fund’s capital across various investments.
Facilitating relevant research and analysis to guide investment decisions (i.e., companies, industries, and macroeconomic data).
Overseeing functions such as investor relations, legal and regulatory compliance, internal processes and risk management.
Leading and facilitating collaboration between teams.
Portfolio Manager
While a Fund Manager oversees many facets of the fund’s operations, a Portfolio Manager focuses specifically on the investment decisions and the day-to-day management of the fund's portfolio.
In conjunction with assisting the Fund Manager in managing specific portfolios or asset classes, the Portfolio Manager plays a critical role in designing and executing the investment strategy and managing the hedge fund’s assets to meet investment objectives.
Key responsibilities include:
Devising investment strategy and processes.
Constructing and managing portfolios.
Measuring performance and managing risk.
Making decisions regarding the trading of investments and the allocation of assets.
Conducting market research and analysis.
Monitoring the performance of the portfolio against benchmarks, peers, and internal targets.
Communicating with investors about the portfolio's performance, strategy and market outlook.
Managing regulatory requirements with authorities like the Monetary Authority of Singapore (MAS)
Analyst
A hedge fund analyst conducts comprehensive market research and analysis to support investment decisions. These critical insights help Portfolio Managers identify and evaluate investment opportunities in line with the fund’s trading strategy.
Key responsibilities include:
Researching individual securities, market sectors and macroeconomic trends.
Leveraging data to help manage risk and identify potentially attractive investments.
Providing insights into market dynamics and potentially attractive companies and investments.
Evaluating investment opportunities.
Conducting financial modelling to project company performance, including revenue, cash flow and valuation metrics.
Monitoring portfolio holdings.
Trader
A hedge fund trader is largely responsible for executing trades and managing risk within the fund’s portfolio.
Apart from buying and selling, this role centres around ensuring that all transactions align with the fund’s goals and objectives.
Key responsibilities include:
Monitoring market conditions and analysing financial and technical data to make informed trading and investment recommendations.
Managing and executing trades efficiently using advanced trading platforms.
Researching investment opportunities.
Working closely with the Portfolio Manager/s to execute relevant trades.
Facilitating risk management strategies.
Fostering strong relationships with brokers, market makers and other financial institutions.
Ensuring all trades adhere to compliance and regulatory regulations.
General Counsel
In Singapore’s complex realm of alternative investments, a General Counsel is an inherent part of any successful hedge fund. These experts work to ensure that the fund operates within the guidelines of Singapore’s financial and legal regulations, providing strategic legal advice to ensure compliance with regulatory requirements.
Key responsibilities include:
Overseeing all legal and regulatory matters for the fund.
Managing regulatory filings with authorities like the MAS.
Navigating jurisdictional requirements and international laws regarding cross-border investments.
Drafting and reviewing legal documents.
Overseeing the legal components of fund formation.
Managing and mitigating legal disputes or regulatory issues.
Developing internal policies to maximise legal and ethical operations.
Compliance Manager
The success of a Singapore hedge fund hinges on compliance. As such, firms look to Compliance Managers to ensure that the fund operates within the framework of legal and regulatory requirements. In a tightly regulated ecosystem like Singapore, a Compliance Manager is pivotal in ensuring that the fund mitigates risk and regulatory violations.
Key responsibilities include:
Monitoring compliance with laws, regulations and internal policies to avoid breaches and penalties.
Remaining abreast of regulation changes and compliance laws set by entities like the MAS.
Developing and implementing policies to prevent legal breaches.
Conducting regular audits.
Ensuring that the fund’s practices comply with anti-money laundering (AML) laws, data privacy regulations and other legal requirements.
Conducting training programs for staff to enhance awareness of regulatory requirements and internal compliance policies.
Chief Operating Officer (COO)
Managing day-to-day operations, including human resources, legal, and administrative functions, a COO helps to ensure that the fund runs effectively and efficiently. A COO plays a fundamental role in scaling the fund’s operations as it grows, ensuring that its structures and processes remain efficient, compliant and adaptable.
Key responsibilities include:
Leading the fund’s operational strategy.
Overseeing functions such as investor relations, legal and regulatory compliance, portfolio management and internal processes.
Aligning the fund's operational activities with its strategic goals.
Leading operational teams and facilitating their collaboration.
Overseeing the fund’s budgets, cash flow and expense management to maintain financial prosperity.
Working closely with traders and Portfolio Managers to optimise trading workflows and processes.
Risk Manager
A Risk Manager works to identify, assess and manage the risks associated with a fund’s investments.
This role is instrumental in safeguarding the fund’s assets, ensuring regulatory compliance and maintaining investor confidence.
Key responsibilities include:
Monitoring exposure to risk factors.
Developing risk management frameworks.
Utilising risk modelling and analytics tools to track portfolio risks.
Conducting stress testing and scenario analysis to identify vulnerabilities and prepare mitigation strategies.
Ensuring regulatory compliance.
Distilling complex risk metrics to managers and stakeholders.
Finance Director
A Finance Director works to ensure the firm's financial health and strategic growth.
Overseeing financial affairs, including accounting, budgeting and reporting, the Finance Director helps to steer the fund towards strategic growth through sound financial management.
Key responsibilities include:
Managing and overseeing the financial elements of the fund.
Facilitating comprehensive and cohesive financial reporting and auditing.
Conducting budgeting and forecasting.
Adhering to regulatory requirements.
Monitoring and managing the fund’s cash flow and liquidity.
Investor management.
Supporting fundraising efforts.
Identifying and addressing operational risks.
Human Resources Manager
If you’re wondering how to set up a hedge fund, start by making people your priority.
A Human Resources Manager is the key to finding (and managing) the human capital within the fund – your employees!
These professionals are responsible for recruiting and hiring your team and implementing practices that will empower them to hit the ground running.
Key responsibilities include:
Developing and overseeing recruitment, onboarding and training strategies.
Managing relationships with recruitment agencies and local talent.
Aligning hiring processes with the fund’s growth and cultural goals.
Designing, implementing and managing effective processes around compensation, benefits, performance management, development and training.
Ensuring HR operations adhere to relevant regulations and labour laws.
Leading initiatives around employee relations, organisational development and workforce planning.
Overseeing workplace health and safety programs to ensure a safe and inclusive environment.
Related: How to start a venture capital firm with the right expertise
How to recruit the right talent when starting a hedge fund
If you’re wondering how to set up a hedge fund, you might have questions about where to begin. Miki says it’s important to prioritise your recruitment efforts.
She says, “The talent you choose to engage could make or break your fund. Don’t be afraid to ask direct questions about what a candidate can bring to the table.
For example, proficiency in English and other relevant languages, such as Mandarin Chinese, is a major asset, especially when interacting with clients and business partners.”
Recruiting the right mix of professionals is critical to the success of a new hedge fund. With so much at stake, local experts can help to guide smooth operations, strategic investment decisions and sound compliance.
“Consider hiring professionals with experience in the Singapore financial market. Ideally, these people will be the most adept at navigating local regulations and understanding the market dynamics. They should also be well-versed in Singapore's regulatory framework, including the MAS requirements,” says Miki.
If you want to optimise the recruitment process, consider connecting with Robert Half. With a range of hedge fund recruitment solutions available, we’ll work with you to simplify the process and get your fund up and running sooner. Our team of dedicated experts will help to recruit the most skilled local candidates to lead your fund forward.
Steve Jobs once said, “Great things in business are never done by one person. They’re done by a team of people.” In the world of Singapore hedge funds, the right team is integral to success. When it comes to setting up a hedge fund, start with recruiting the right people. Sure, a sound investment strategy and healthy capital might help, but it’s your team of experts who will help to navigate the complexities of Singapore’s hedge fund ecosystem, enabling your fund to thrive.
Related: How to start a private equity firm with the right team
Frequently Asked Questions (FAQs)
What is the experience and track record of the investment team in Singapore or the Asia Pacific?
Experience and a proven track record are essential for any investment team in Singapore or the Asia Pacific. Ultimately, experience and expertise will directly impact the fund’s reputation, effectiveness and ability to generate consistent returns.
To boost sustained performance and investor confidence, look to recruit team members who have:
Local market knowledge
Targeted expertise
A history of strong industry achievements
Comprehensive regulatory knowledge
Strong global and regional networks
How will the investment team be compensated?
Investment team compensation can vary between funds. That said, it’s typically structured to align employee interests with the fund's performance and long-term success.
A compensation framework could include:
Base salary
Performance bonuses
Profit sharing
Management fees
Equity participation
Long-term incentives
What is the team's investment philosophy and approach?
The investment philosophy and approach varies between funds. It can be influenced by factors such as the fund’s mission, investor goals and market conditions.
Key aspects of a team's philosophy and approach may include:
Core beliefs
Research-driven processes
Risk management
Regional focus
Investment prospects
Innovation
