Singapore feared it might lose its attraction as an Asian magnet for start-up hedge funds after the Lehman Brothers collapse and the $65bn swindle by Bernard Madoff changed the world of investment management.

But, while a tightening of rules is expected to make it more expensive for funds to launch in Singapore, the number of start-ups is on the rise and the country is setting its sights on overtaking Hong Kong as the market of choice in Asia for hedge fund managers.