By Christina Shalhoub, Managing Director, U.S.
As demand for global exposure continues to grow and allocators increasingly expect managers to demonstrate international capability, the ability to access Asia-Pacific (APAC) public markets efficiently, compliantly and at scale has become an important strategic consideration for U.S. asset managers focused on long-term APAC growth.
In this article, we take a closer look at why APAC is so compelling for U.S. managers, with specific focus on Hong Kong, Singapore and Japan. We outline the different options for expansion into these markets and spotlight what managers should be thinking about as they venture into Asia.
Why APAC matters to U.S. asset managers
For U.S. asset managers operating in an increasingly competitive and concentrated domestic market, the APAC region has become an attractive source of diversification and growth.
U.S. equity markets continue to be dominated by a relatively small group of mega-cap issuers, with IPO activity more constrained and correlations across asset classes rising. In contrast, APAC offers a broader opportunity set – spanning developed and high-growth emerging markets, earlier-stage public companies, and sectors that are underrepresented in U.S. benchmarks.
Key APAC market facts and figures:
- APAC public markets ended 2025 with a record US$334 billion raised (according to Dealogic), making up over a third of global equity capital market volume for the year, with APAC IPO proceeds increasing at +73% year-on-year
- Tech, media and telecoms (TMT) stocks achieved the highest sector share in each of India, Hong Kong, China, Japan and South Korea, with industrials and financial institutions group (FIG) stocks holding the next largest share
- 2026 is looking stronger, with key markets in the region competing for IPO and equity capital markets (ECM) opportunities, as well as APAC stock exchanges introducing new products and connectivity channels
- The Korean equity market performed strongly in 2025, but while the use of Legal Entity Identifiers (LEIs) is becoming increasingly important from a regulatory and market infrastructure perspective, most foreign asset managers continue to access this market by trading offshore through local brokers
For U.S. managers, APAC is about more than simple geographic diversification.
- The region offers meaningful portfolio and return benefits:
- Ability to deploy capital at scale
- Improved balance across market cycles
- Access to performance drivers less correlated to U.S. interest rates and domestic macro conditions
- Multiple access pathways allow for tailored market entry:
- Offshore exposure via established market infrastructure
- Selective on-the-ground presence in key financial centers including Hong Kong, Singapore and Japan
- Flexibility to align investment strategy with specific operational and regulatory considerations
Navigating APAC’s key markets
Hong Kong
Hong Kong Stock Exchange (HKEX) is one of the most active markets in APAC and the average daily turnover in January 2026 was HK$272.3B, an increase of 89% from HK$143.8B for the same period last year. The average daily turnover of derivative warrants in January 2026 was HK$7.8B, up 77% on the HK$4.4B for the equivalent period in 2025.
Hong Kong was 2025’s top IPO fundraising venue globally, with proceeds rising 231% YoY to US$37.4B, and 2026 has started strong with US$3.7B raised via IPOs as of 23 January 2026 (compared with US$0.8B raised across all of January 2025). Looking ahead, according to Dealogic data, HKEX currently has a robust listing pipeline of more than 350 companies. Furthermore, APAC equity-linked volumes reached US$33B in 2025, with Hong Kong and China accounting for 64% of activity.
Key developments at HKEX driving this activity:
1. New listing frameworks for technology companies
- HKEX Tech 100 Index and specialist technology channel
- Early guidance and confidential pre-filing for eligible tech issuers
- Redesigned IPO allocation and price discovery process
- Outcomes: lower execution risk, faster time to market, and strong institutional price alignment
2. A Chinese Mainland ETF tracking the Tech 100 to connect Hong Kong-listed tech companies with Chinese Mainland capital
3. Increased support for cornerstone investors from Mainland China and institutions in the UAE, Singapore, Korea, Switzerland and the U.S. using Hong Kong’s super-connector role
The HKEX Stock Connect Scheme allows closed loop trading in stock listed on the Shanghai and Shenzhen Stock Exchanges in CNY but settled in HKD, as well as dual listings between the Mainland Chinese and Hong Kong exchanges.
HKEX also operates Bond Connect, SWAP Connect and ETF Connect for Mainland China exposure. The uniquely qualified talent set for these trades in Hong Kong attracts many U.S. and EMEA managers who require China exposure without establishing in Mainland China.
For U.S. managers, establishing in Hong Kong is widely regarded as the most efficient offshore route to Mainland China exposure. This approach:
- Enables trading in China-linked securities without requiring China regulatory licensing
- Preserves operational and governance independence
- Offers a longstanding track record of use by U.S. and EMEA managers
- Operates under a well-understood regulatory framework aligned with standards familiar to SEC-regulated firms
- Is overseen by the Hong Kong Securities and Futures Commission (SFC), an efficient and independent regulator
Japan
Since 2024, the Japanese government has introduced initiatives to shift household financial assets (estimated by the Bank of Japan to be around US$15 trillion at the end of 2025) from cash to investments to further stimulate the domestic stock market. Developments include:
- The creation of Nippon Individual Savings Account Schemes, introducing tax exemptions for amounts invested in the stock market
- Reduced minimum investment amount to Y100,000
- The use of stock splits to lower the price per trading unit to encourage smaller retail investors
- Requiring listed companies trading below a price-to-book ratio of 1 to disclose measures for capital efficiency improvement and to achieve return on equity improvement by selling non-core, underperforming businesses, redeploying capital and improving operational effectiveness
- Continuing corporate governance reforms from 2023 to reduce cross-shareholdings in listed companies from over 60% in 1990 to approximately 12% by end 2025
- A national strategy to build investment literacy
Japan’s market transformation over the past decade has repositioned it as a reform-driven value and governance opportunity for long-term U.S. investors. Enhanced focus on capital efficiency, transparency and shareholder returns has strengthened the case for activist and engagement strategies, while the depth and liquidity of Japanese public markets support institutional-scale investment. These structural changes mark a clear shift from historical norms, making Japan more accessible and strategically compelling for U.S. asset managers.
Singapore
Singapore’s local stock market is smaller than that of Japan or Hong Kong but offers an attractive base for investment throughout APAC – particularly into India, with which Singapore has beneficial double taxation arrangements. This is an important access point considering that in 2025 India accounted for 25% of APAC’s IPO activity with five $1 billion+ IPOs.
Singapore has better infrastructure for commodities trading in energy, agricultural and general commodity derivatives in APAC while Hong Kong’s focus is China-centric commodities trading and metals via the London Metal Exchange link.
Since 2025, the Singapore government has introduced initiatives to grow the local stock market. The Monetary Authority of Singapore (MAS) has an Equity Development Plan in which government reserves are allocated to Singapore-based managers investing in Singapore stocks (which was increased on 12 February 2026 to S$6.5 billion). There’s also its Value Unlock Program to improve market-making, increase liquidity and enhance valuations, along with a dual-listing arrangement with NASQAQ.
Singapore has emerged as a preferred APAC operating hub for U.S. managers prioritizing regulatory certainty, tax clarity and cross-border scalability. The jurisdiction offers a regulatory environment that is familiar to U.S. compliance teams and the ability to efficiently implement global compliance frameworks. This is supported by a deep and well-developed ecosystem spanning fintech, custody, and institutional-grade fund administration.
Key considerations when setting up in APAC
Offshore to onshore: a gradual migration
U.S. managers rarely enter APAC with a fully built onshore footprint from day one. Instead, market entry is typically incremental and strategy-driven, balancing investment opportunity, investor demand, operational complexity and regulatory risk. Understanding how and when to introduce local substance is critical to managing costs while maintaining flexibility.
Most U.S. managers begin their APAC exposure by trading from offshore locations – typically the U.S. or EMEA – using local brokers, custodians and established market connectivity programs. This approach allows managers to access APAC public markets efficiently while minimizing upfront regulatory burden and fixed costs.
As APAC becomes a more meaningful focus for investment, managers may choose to move closer to the opportunity by establishing extensions of offshore investment teams in Hong Kong, Singapore or Japan, and in some cases, research-only capabilities in markets such as China or India.
As allocations grow or strategies become more region-specific, U.S. managers may then establish an onshore APAC presence to support execution, research or investor engagement. The decision to move onshore is typically driven by scale, strategic complexity or regulatory expectations rather than geographic presence alone.
Importantly, many APAC jurisdictions allow flexibility in how investment decision-making, trading and support functions are allocated across global platforms.
When does local presence become necessary?
A local regulatory presence generally becomes necessary when activities conducted on the ground extend beyond passive or support functions. This may include discretionary investment management, formal research teams with decision-making authority, or sustained client-facing activity.
While jurisdiction-specific thresholds vary, regulators across major APAC markets increasingly focus on substance, governance and oversight rather than headline staffing numbers.
The decision to establish onshore operations in APAC is usually linked to identifiable inflection points, such as:
- APAC becoming a material allocation within global portfolios
- Launch of APAC-focused or Asia-dedicated strategies
- A desire to actively market in APAC regions
- Increased demand from institutional or regional allocators
- Need for real-time execution or local research capabilities
While there is no uniform AUM threshold, the APAC onshore move is generally justified once APAC exposure shifts from opportunistic to strategic.
Two recurring challenges in APAC expansion
U.S. managers expanding into APAC often encounter two recurring challenges:
- Overbuilding too early: Establishing full operating infrastructure before scale is achieved can create unnecessary cost, regulatory complexity and internal strain
- Underestimating compliance and regulatory nuance: While leading APAC jurisdictions share similarities with U.S. and UK regimes, local requirements around licensing, reporting and governance must be carefully managed to avoid misalignment or supervisory issues
A measured, phased approach, supported by experienced local advisors, helps managers scale efficiently while preserving regulatory credibility and operational resilience.
Whether U.S. and EMEA asset managers operate from offshore or establish a local presence in APAC typically depends on their core objective – executing investment strategies, raising capital, or building a longer-term regional footprint.
Looking for regulatory specifics? As APAC is not a single market, entry mechanisms vary by jurisdiction. For a deeper dive into the specific jurisdictional regulatory requirements for entry into Hong Kong, Singapore and Japan, click here to read Philippa Allen’s article.
APAC: Capital development and growth opportunities for U.S. asset managers
APAC’s relevance to U.S. asset managers is no longer driven solely by opportunistic allocations or tactical exposure. Instead, the region has become an integral component of global investment strategies – offering portfolio diversification, differentiated sector exposure, and access to some of the world’s most active and evolving public markets. As issuance activity, liquidity and investor participation across APAC continue to expand, U.S. managers that establish informed and flexible access models are better positioned to capture long-term value.
Importantly, entry into APAC does not follow a one-size-fits-all approach. Many U.S. managers initially access the region through offshore trading and established market connectivity channels, minimizing operational complexity while testing investment theses. As allocations grow and strategies mature, managers may selectively deepen their presence – whether to support execution, enhance research capabilities, or respond to investor expectations – by building regulated substance in key jurisdictions such as Hong Kong, Singapore or Japan.
While APAC remains a highly fragmented region from a regulatory and market structure perspective, regulatory standards across leading financial centers increasingly align with those familiar to U.S. managers, including expectations around governance, risk management and investor protection. With careful structuring and the use of experienced local advisors, global compliance frameworks are often leveraged with limited adaptation, enabling firms to manage regulatory risk without disrupting existing operating models.
For U.S. managers assessing the next phase of global growth, APAC represents a strategically important pillar – one that rewards early familiarity, thoughtful structuring and a clear understanding of regional nuances. Firms that approach APAC proactively, rather than reactively, are better positioned to respond to shifting capital flows, evolving investor preferences, and emerging opportunities in an increasingly global investment landscape.
Take the next step in your APAC strategy
As APAC becomes an increasingly important driver of global portfolio construction, the question for U.S. asset managers is no longer whether to access the region, but how to do so efficiently, compliantly and at scale.
Whether you’re evaluating initial offshore trading access, considering a selective on-the-ground presence or preparing for a regulated buildout in Hong Kong, Singapore or Japan, early structuring decisions can meaningfully impact cost, speed to market, and long-term flexibility.
Speak to us
At IQ-EQ, we work with U.S. asset managers at every stage of their APAC journey, helping translate strategy into practical operating and regulatory solutions. Our experienced, on-the-ground APAC team helps define the right entry structure and then executes to ensure firms can operate efficiently, compliantly, and at scale.
To explore how your firm can access APAC markets in a way that aligns with your investment objectives, operating model and risk appetite, contact our team today. We’re ready to discuss your APAC entry roadmap, review jurisdiction-specific considerations, or help you assess the right timing and structure for deeper regional engagement.
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