GLOBAL - PricewaterhouseCoopers (PwC) has predicted that Singapore will overtake London and Boston as the second-largest asset management hub in the world in the next 15 years.
According to a report by the accounting firm that examines the hubs of various industries in 30 years' time, new countries will seize the opportunity to house financial powerhouses in the wake of the financial crisis and the possibility of stricter regulation in traditional markets.
It said stricter regulation in Europe was dissuading companies from further expanding in Europe.
The report said: "The European Union's Alternative Investment Fund Managers directive has raised the spectre of increased regulatory burdens for firms based in London and other EU centres."
PwC cited the move of a number of hedge fund managers, which manage approximately $50bn in assets, to Geneva to support its conclusion.
However, it noted that while the managers had relocated to Switzerland, the funds remained in their original countries.
PwC said it expected growth in asset management to be focussed on two regions in Asia, namely Hong Kong and Singapore.
"Both locations offer less burdensome tax regimes than their western counterparts and have 'well-regulated but moderate' regulatory structures," it said.
It said that while Hong Kong attracted significantly more fund launches in the first half of the year, with 65% of new launches occurring in the city, Singapore will succeed over the long term because of its government's active promotion of the country.
PwC estimated that Singapore would become second behind only New York by 2025, with more assets domiciled in the country than London.
It conceded that while Beijing, Tokyo and Hong Kong would remain important, their significance would mostly be for their respective domestic markets, while projections for assets domiciled in Singapore estimated an increase from $50bn (€38.2bn) this year to more than $250bn in 2040.
PwC said London's gradual growth would continue over the next 30 years as a result of the incoming UCITS directive, which requires fund managers to be based in Europe.