Singapore appears to be gaining ground in its battle against Hong Kong as the region’s premier hub for asset management.

A survey conducted by AsianInvestor and Clifford Chance finds more industry executives voting for Singapore as the better-positioned city. This year 47% voted for the Lion City, versus 39% last year.

Hong Kong had won 59% of last year’s vote but attracted only 51% this time around. So the Fragrant Harbour remains the leader, but by a narrower margin.

The survey received 160 responses primarily from regionally located business and sales executives among asset management firms, as well as from some asset owners and distributors of investment products.

Singapore’s gain may have something to do with dashed hopes that renminbi-denominated products would put Hong Kong permanently in front. Last year, we asked if the offshore RMB market gave Hong Kong an edge over Singapore, and 82% of respondents said yes.

Since then RQFII has had less of an impact than anticipated and flows into dim-sum bonds have slowed. That may be why this year our survey finds only modest interest in these areas.

We asked whether firms intend to launch offshore or onshore investment products or share classes denominated in China, in ‘offshore China’, or both.

“Remarkably few fund managers want to go onshore,” says Mark Shipman, partner and head of global investment management sector at Clifford Chance, noting that 64% of respondents indicated no immediate plans to launch RMB-denominated products. And 46% say they have no intention to do so.

Only 16% indicate they are launching products or share classes for offshore China products, 7% for onshore, and 12% for both. So about a third of the industry appears to be focused on this opportunity.

That’s not a small amount, but it isn’t the gold rush that was expected a year ago. “It appears that RMB products are part of the landscape but there is not a hurry to get in there,” Shipman says. “Fund managers will take their time.”

On a related note, our survey asked people what jurisdiction proposes the most pragmatic regulatory regime for the funds management industry. Singapore came top, with 43% of the vote, followed by Hong Kong with 21%.

This result is unchanged from last year. Clifford Chance partner Matthias Feldmann warns that the perception of Singapore as ultra-friendly is out of date. “Not too many people have caught up with Singapore’s proposed licensing regime, which will be similar to Hong Kong’s,” he says.

This introduces a requirement for fund houses managing more than S$250 million to obtain a licence, hire a minimum number of employees, and put more capital behind a business in Singapore. However, the rules have yet to come into effect, so for now the industry retains a favourable image of the Lion City.

Singapore is not, however, seen as an important source of capital-raising. It is too small and its biggest institutions such as Government Investment Corporation and Temasek are adept at managing investments in-house.

Singapore won only 2% of votes for the jurisdiction for raising the most capital. Hong Kong took 16% of the vote, China 18%, and emerging Asia took 20%. The US remains the most important source of capital-raising, with 28% of the vote.

The full results of the survey appear in the July edition of AsianInvestor magazine.