Are your funds fit for cost savings and efficiency gains?

Are your funds fit for cost savings and efficiency gains?

In the fast-evolving and competitive landscape of Singapore's fund management sector, efficiency isn't just an option — it's a necessity.

Over the past decade, Singapore has become a key global hub for fund management, attracting both large institutions and smaller, boutique fund managers. In 2014, Singapore had nearly 600 registered and licensed fund managers under the Monetary Authority of Singapore (MAS), and as at September 2024, this number has grown to more than 1,200.

With Singapore rising as a pivotal fund management hub over the last decade, the scene has attracted a large number of players, from heavyweight institutions to boutique managers. Yet, the post-covid economic shifts, rising geopolitical tensions, and inflation have tightened the screws, making capital more expensive and harder to come by. The recent dip in Asia-Pacific's private equity deal activity underscores the urgency for fund managers to fine-tune their operations for leaner times.

The increased cost of capital and higher interest rates have made it increasingly difficult for fund managers to raise new capital, especially for newer players in the market. According to Bain & Company’s Asia-Pacific Private Equity Report 2024, private equity deal activity in the Asia-Pacific region, including deal values, exits, and fundraising, saw a sharp decline in 2023. Fundraising levels dropped by nearly 50% from their peak in 2021, reflecting continued challenges in the market.

In light of these difficult fundraising conditions, managers – particularly those with existing funds – should re-evaluate their operating models including arrangements with fund services providers. A key focus on cost reductions in challenging markets, while delivering value to investors, can differentiate a manager in this environment. Moreover, by demonstrating the ability to operate efficiently and rationalise costs in challenging times, fund managers can strengthen investor relationships and better position themselves for the eventual market recovery.

The Ogier Global solution: cutting costs, enhancing efficiency

Here's the reality: not all funds are equally positioned to leverage cost savings and operational efficiencies. But with Ogier Global's strategic review and consolidation approach, fund managers overseeing multi-jurisdictional structures, complex holdings, or mature funds can uncover significant savings. By simplifying service provider setups and removing unnecessary administrative elements, we're able to accelerate your fund in a streamlined manner.

Below are the types of fund managers who could potentially realise the most significant savings:

Multi-jurisdictional structure

Managers overseeing a combination of onshore and offshore vehicles – including investment funds, special purpose vehicles (SPVs) and feeder entities – often face complex reporting, regulatory and administrative requirements. Managing multiple service providers across a number of jurisdictions, each with its unique set of regulations, can be resource-intensive and time-consuming.

Layered and complex holding structures

Multi-layered structures, such as those that include single-asset SPVs or multiple holding entities beneath the main investment vehicle, often require high levels of administrative oversight and coordination. 

Mature funds including those which have reached the end of their term

Structures that are far beyond their investment period and which have entered the maturity phase. Such early vintage funds may experience fewer, less complex transactions and are often focused on disposals, disbursements, and managing recurring expenses (for example professional fees). This would also apply to funds which have reached the end of their term but have not yet managed to fully exit all investments and are now either in an extended term or in liquidation.  With simplified transaction volumes, many structures end up paying more than necessary for services initially negotiated when transaction volumes were higher.

Legacy or multiple service providers

As funds grow and structures become more complex, managers may engage with several service providers across various functions (including legal, administrative, corporate secretarial). This can lead to fragmented service delivery, multiple fee models, and administrative inefficiencies. For mature funds with relatively straightforward operations, continuing to manage multiple service providers can become a costly and time consuming.

Additionally, managers may find themselves in challenging situations due to service provider changes, such as ownership and management transitions resulting in service disruptions or high staff turnover.

How we do it

Comprehensive assessment: we dive deep, assessing your fund's structure from every angle — legal, corporate, and service fees —to pinpoint inefficiency and overspending.

Objective proposal: if we find room for improvement, we'll craft a detailed, fixed-fee proposal, giving you cost predictability and a leaner operational model.

Seamless migration: transitioning might seem daunting, but we've got it down to a science. Our structured approach means minimal disruption, ensuring a smooth shift to a more efficient, cost-effective service model.

Why Ogier?

In today's challenging market, managing multiple or outdated service setups can drain your focus and funds. Ogier Global is set to change that. We aim to streamline your operations, aligning your service model with your fund's actual needs, ensuring you're not just surviving but thriving in tough times. With Ogier, you gain a partner committed to your fund's long-term efficiency and cost-effectiveness.

Ready for a shift?

Let's talk about shaping a more efficient future for your fund. Contact us for a complimentary consultation and discover the Ogier difference.

About Ogier

At Ogier, we blend international expertise with local insights to deliver comprehensive services to corporates, funds, and their stakeholders worldwide. With a relentless focus on quality and integrity, we're your partners in navigating complex transactions and regulatory landscapes, ensuring your operations are smooth, compliant, and cost-effective. From our Singapore hub, we connect you with global expertise tailored to the Asian market, providing unmatched support across all facets of fund management.

About Ogier

Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.

Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice