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MAS puts $5bn PE mandate on the table

Turning up the heat on rival financial hub Hong Kong, Singapore's new initiative builds on its current $7.25bn external asset manager programme for public markets.

The Monetary Authority of Singapore has launched a private market programme, in which it will allocate $5bn of its own funds as part of its investment portfolio into the private investment asset class, Peter Ong, MAS board member and chairman of Enterprise Singapore, said during a keynote speech at the Singapore fintech festival yesterday.

“These funds will be placed for management with top global private equity and infrastructure fund managers who are committed to deepening their existing presence or establishing a significant presence in Singapore,” he said.

Private equity is one of the fastest growing asset classes in Singapore. Last year, private equity assets grew S$186bn ($134.9bn) from S$152 in 2016, according to MAS’ latest asset management survey.

Around 85% of assets are invested in Asia, with Asean, followed by India and China as top investment destinations, Ong said, adding that there are at least 220 private equity and venture capital managers located in Singapore.

Ong noted that the $5bn programme builds on MAS’ existing external fund manager programme for the public market, which has anchored global asset managers in Singapore.

The external fund manager programme was launched in 1998, when MAS decided to allocate S$10bn of its funds to external fund managers, according to a statement at the time. This was on top of the S$25bn that sovereign wealth fund GIC had set aside for outplacement with external fund managers.

Other PE initiatives

The programme complements other PE-related initiatives, including “Match” (Meet Asean’s Talents and Champions), which is a deal-making platform that matches Asean-based enterprises with global private equity and venture capital firms, Ong added.

“Participating investors have indicated their intentions to invest up to $12.2bn into Asean enterprises over the next three years,” he said.

Private equity and venture capital investments into the Asean region nearly tripled to reach $23.5bn in 2017, Ong said, adding that its momentum is expected to remain robust on the back of strong Asean economic growth and the immense infrastructure needs in the region.

Other efforts to develop Singapore’s PE industry include growing the domestic talent pool by providing more flexibility on the hiring of foreign specialists in the PE and venture capital sector, the MAS noted in a separate statement.

Last month, Singapore also introduced the Venture Capital Investment Model Agreements for early stage VC transactions, which will enable deal and cost efficiencies through a set of standardised and easily accessible documents that investors and enterprises can use, the regulator added.

“Collectively, these initiatives will catalyse a deeper and more vibrant private markets ecosystem in Singapore that will strengthen the financial channels to support enterprises,” Ong said.

Part of the Mark Allen Group.