Key Takeaways
- • Singapore added 22 new fund management companies in 2025, bringing its total to 1,320, while Hong Kong's count rose 7% to 2,358, according to the Monetary Authority of Singapore and the Securities and Futures Commission.
- • Net fund inflows rose 29% year on year in Singapore to S$376bn (US$293bn) in 2025 and 193% in Hong Kong to HK$2.1trn (US$268bn).
- • Boutique nonbank prime brokers such as StoneX and Marex are targeting day-one hedge fund clients that bulge bracket banks decline due to minimum revenue and AUM thresholds, strategy restrictions and balance sheet limits.
- • Banks have grown more cautious after the 2021 Archegos collapse and the 2026 Situational Awareness drawdown, which cut that fund's portfolio from a US$45bn peak to about US$10bn.
- • Nonbank primes typically retain day-one relationships as funds grow and add brokers, though growing funds are expected to return to large international banks for additional services.
Summary
Portfolio managers are increasingly setting up hedge funds in Hong Kong and Singapore to take advantage of tax incentives in both cities during a regional trading boom, according to International Financing Review. Boutique nonbank prime brokers are positioning themselves to capture the emerging managers that form this wave of launches.
According to the Monetary Authority of Singapore and the Securities and Futures Commission, Singapore saw 22 new fund management companies set up in 2025, bringing its total to 1,320, while Hong Kong's count rose 7% to 2,358. Net fund inflows grew 29% year on year in Singapore to S$376bn (US$293bn) in 2025 and 193% in Hong Kong to HK$2.1trn (US$268bn). Hong Kong and Singapore have also announced measures this year to attract fund managers globally. Rob Cheeseman, head of prime services for Asia at New York-listed Marex, said investor interest in Asia has renewed alongside higher equities activity and a growing focus among global allocators on diversifying beyond the United States. He cited portfolio managers leaving large global firms and multi-strategy platforms to launch their own businesses, as well as non-Asian managers building regional presence.
The opportunity for nonbank primes lies in day-one prime services. Most Asian banks have limited prime brokerage capabilities, and bulge bracket banks maintain higher barriers to entry for new clients. Kellie Tan, head of prime services and securities clearing at StoneX, said her firm set out to differ from bank primes, noting that clients' biggest challenges with bulge bracket primes include acceptable strategies, balance sheet restrictions and minimum revenue or AUM hurdles. A hedge fund source said large banks have resisted onboarding smaller funds because the revenue they generate is insufficient.
Bank caution has intensified following the 2021 collapse of Archegos Capital Management, which caused losses at Credit Suisse, Nomura, Morgan Stanley and UBS. The hedge fund source said the July 2026 drawdown at Situational Awareness, the AI-themed fund led by former OpenAI researcher Leopold Aschenbrenner, reinforced that stance. Its portfolio fell to about US$10bn from a US$45bn peak amid an AI stock rout, and it sold the bulk of its public equities portfolio to Citadel.
Nonbank primes are offering custody, clearing, multi-asset execution, financing and hedging, with Tan saying StoneX can also match the full suite available from bulge bracket providers. Day-one relationships tend to endure: funds typically add a second broker for diversification rather than replacing the original. Nonbank primes also pick up clients that banks offboard for balance sheet or risk-parameter reasons. The Hong Kong-based banker said the revenue a client pays must justify the time spent on it. The hedge fund source expects to need larger international investment banks as the fund grows, noting that US and European banks have stable brokerage franchises and can be selective.
According to the Monetary Authority of Singapore and the Securities and Futures Commission, Singapore saw 22 new fund management companies set up in 2025, bringing its total to 1,320, while Hong Kong's count rose 7% to 2,358. Net fund inflows grew 29% year on year in Singapore to S$376bn (US$293bn) in 2025 and 193% in Hong Kong to HK$2.1trn (US$268bn). Hong Kong and Singapore have also announced measures this year to attract fund managers globally. Rob Cheeseman, head of prime services for Asia at New York-listed Marex, said investor interest in Asia has renewed alongside higher equities activity and a growing focus among global allocators on diversifying beyond the United States. He cited portfolio managers leaving large global firms and multi-strategy platforms to launch their own businesses, as well as non-Asian managers building regional presence.
The opportunity for nonbank primes lies in day-one prime services. Most Asian banks have limited prime brokerage capabilities, and bulge bracket banks maintain higher barriers to entry for new clients. Kellie Tan, head of prime services and securities clearing at StoneX, said her firm set out to differ from bank primes, noting that clients' biggest challenges with bulge bracket primes include acceptable strategies, balance sheet restrictions and minimum revenue or AUM hurdles. A hedge fund source said large banks have resisted onboarding smaller funds because the revenue they generate is insufficient.
Bank caution has intensified following the 2021 collapse of Archegos Capital Management, which caused losses at Credit Suisse, Nomura, Morgan Stanley and UBS. The hedge fund source said the July 2026 drawdown at Situational Awareness, the AI-themed fund led by former OpenAI researcher Leopold Aschenbrenner, reinforced that stance. Its portfolio fell to about US$10bn from a US$45bn peak amid an AI stock rout, and it sold the bulk of its public equities portfolio to Citadel.
Nonbank primes are offering custody, clearing, multi-asset execution, financing and hedging, with Tan saying StoneX can also match the full suite available from bulge bracket providers. Day-one relationships tend to endure: funds typically add a second broker for diversification rather than replacing the original. Nonbank primes also pick up clients that banks offboard for balance sheet or risk-parameter reasons. The Hong Kong-based banker said the revenue a client pays must justify the time spent on it. The hedge fund source expects to need larger international investment banks as the fund grows, noting that US and European banks have stable brokerage franchises and can be selective.
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