Singapore as a Funds Destination

Morgan Lewis
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Assets under management in Singapore continue to grow.

The Monetary Authority of Singapore (MAS) reported in its annual industry survey that assets under management (AUM) managed by Singapore-based managers grew 7% to stand at S$2.7 trillion ($2 trillion) in 2017, representing an almost two-fold increase since 2011 when reported AUM was S$1.338 trillion ($1 trillion).

Consistent with global and market trends, alternative AUM increased by 17% whilst traditional AUM saw a much slower 3% growth. Within the alternative space, private equity and hedge increased by 14% and 16% to stand at S$152 billion ($112.24 billion) and S$138 billion ($101.9 billion), respectively, while venture capital experienced the largest percentage increase of 32% to now stand at S$5 billion ($3.69 billion).

MAS reiterated that “Singapore will continue to deepen its venture capital and private equity capabilities and establish itself as a vibrant enterprise financing hub to support the next generation of Asian growth companies,” highlighting that managers of alternative assets “play an important role in stimulating economic dynamism and innovation.”

The Singapore government has been actively promoting Singapore as a destination hub for both fund managers and fund vehicles, leveraging off the excellent financial and talent infrastructure in the city-state. Just this year, MAS conducted three public consultations in the asset management space, proposing to (i) reduce the regulatory and compliance burden on managers of venture capital funds; (ii) introduce into the Singapore legal framework a new investment structure (the Singapore Variable Capital Company) which will allow for segregation of assets and liabilities within a single corporate entity; and (iii) update and streamline existing legislation to facilitate the provision of digital advisory services (such as robo-advisors).

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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