The Monetary Authority of Singapore yesterday unveiled a consultation paper that maintains an exempt fund manager-like status for hedge funds with assets under management of less than S$250 million ($184 million). They will be called 'notified fund management companies'.

The changes -- signalled by AsianInvestor last month and reflecting moves to tighten rules in Europe -- will no doubt fuel the debate over whether hedge funds setting up in Asia will choose Hong Kong or Singapore as their base.

Dennis Barsky, a partner at law firm Jones Day in Singapore, is asked frequently about the arbitrage between the two jurisdictions. He still believes in the Lion City as a good location for hedge funds and thinks managers will decide their location in future based not so much on regulatory issues as on where they can find the most suitable resources. That will most likely be Hong Kong for Greater China funds and Singapore for Asean and India funds.

As for hedge fund start-ups with ambitions to get big, he recommends finding a chief operating officer who can handle all the non-trading duties, so that the portfolio managers are not distracted with signing paychecks.

Singapore law firms say they are working hard on setting up new hedge funds, private-equity funds and hybrid-type funds, such as those with longer lock-ups to accommodate distressed or special-situation deals.

Barsky's speciality is financial institutions, including hedge funds and PE funds. However, he has not sat in an ivory tower all his professional life. For two years he was a portfolio manager at an event-driven firm he co-founded in Singapore, before returning to law in January.

After those two years, he sees a world where hedge funds are finding it harder to raise money, which is why he thinks operations need to be more professionally built out from day one.

"I'm seeing interest in 'friends and family' raises, where people do a first fund for $10 or $20 million and try to build a track record with that, then seek to follow it up later to raise third-party money," he says." For those looking at a bigger launch and want to raise $100 million on that fund, it is harder."

Barsky says he's busy at present and singles out an unnamed Asian credit fund he is working on that he feels is going be a great launch. He says Jones Day is getting queries on the debt side, event-driven, equity long/short and cleantech (the latter within private equity).