Singapore Asset Management Sector Up 16% In 2021
SINGAPORE – Thanks to a robust growth in the alternative investment sector, the city-state’s asset management industry increased by 16 percent to S$5.4 trillion in 2021 on an annual basis, reported Asian Investor on Saturday (22 October, SGT).
According to the latest report published by Singapore’s central bank on Friday (21 October), the year-on-year growth was marginally lower than the 17 percent seen in 2020, but it outpaces global asset under management (AUM) growth of 12 percent last year.
Specifically, alternative investments continue to rise in Singapore, hitting US$0.9 billion AUM or a 30 percent year-on-year surge. Venture capital and private equity recorded the largest growth of 48 percent and 42 percent respectively, while real Estate Investment Trusts (REITs) registered the slowest growth of merely 4 percent.
Notably, alternative investments comprise private equity, hedge funds, REITs, real estate, and venture capital. REITs rose from S$138 billion in 2020 to S$143 billion in 2021, while real estate increased from S$221 billion to S$274 billion over the same period.
However, the Monetary Authority of Singapore (MAS) expects total AUM growth to ease in 2022 because of geopolitical and macroeconomic risks.
“Notwithstanding this, we continue to see keen interest from global and regional asset managers to set up office in Singapore, and/or to designate Singapore as one of the key nodes of their global operations, to tap into the strong network of private wealth managers, family offices and institutional asset owners, as well as investment opportunities in Asia,” stated the central bank.
In particular, 78 percent of came from outside Singapore and 90 percent of the overall AUM was invested into assets outside of the city-state. In the Asia Pacific (APAC) region, 17 percent of the AUM was deployed in Southeast Asia.
“With US and China’s cooling relationship, some real economy investors have turned their attention into the regional economies of ASEAN, which tends to benefit also a regional financial centre like Singapore,” noted BNP Paribas Asset Management’s Director of institutional sales for South Asia, Puay Lit Tan.
“Singapore has also benefited from high-net-worth (HNW) flows for investors looking for a safe harbour for their assets and also the strong push by the authorities to attract family offices.”
Moreover, Singapore’s central bank revealed that 146 new licensed and registered fund management firms were established here, pushing the overall number of such companies to 1,108 as at December 2021.