Published by Asia Asset Management – 7th October 2016
Singapore-based asset managers’ combined AUM increased by 9% last year to reach a fresh high of S$2.6 trillion (US$1.9 trillion) as of end December 2015. According to the Monetary Authority of Singapore (MAS), this was predominately due to strong net fund inflows.
In its newly-released asset management survey, the MAS found that that the increase could almost be entirely attributed to new asset growth. Nevertheless, the trends in different segments were mixed. Private equity (PE)/venture capital (VC) and real estate grew by over 40% and 80% respectively to S$136 billion and S$69 billion, while AUM managed by traditional asset managers increased at a modest pace of 4%. However, several emerging market managers recorded outflows from their equity and bond funds.
Over the past five years, the AUM of Singapore’s asset management industry has expanded at a 14% compound annual growth rate (CAGR). The industry has also maintained a high level of discretionary AUM, which stood at 52% of total AUM as at the end of 2015.
A total of 628 registered and licensed fund managers were surveyed over the course of the survey. Approximately 80% of their funds were sourced from outside Singapore.
According to MAS: “The trends illustrate the crossroads facing the asset management industry. As public market returns disappoint, more investors are seeking excess returns from illiquidity and credit risk premia in private markets. This has caused managers to search for new sources of value to deploy capital”.
The findings also reveal that the fast-growing private market segment offers an opportunity for Asia’s entrepreneurs to keep their companies private for longer, and to grow with them over a greater period of time. “This change in market structure has important implications for Singapore as an international capital market, and how Singapore can support Asian companies throughout their lifecycles”, the report points out.
In terms of asset flows, the survey demonstrates that Singapore asset managers attracted S$203 billion worth of net inflows of funds in 2015, with broad-based net inflows across the traditional and alternative sectors. The report states: “The alterative sector was a major contributor to fund inflows last year. Alternative asset managers garnered 41% share of the net inflow of funds, led by PE/VC and real estate”.
Focussing on the alternatives sector, the MAS states that the segment has grown both in absolute amounts of assets and as a share of Singapore’s total asset management AUM. The alternatives sector represented 16% of AUM in 2015, compared to 14% in 2010, and is made up of PE/VC, hedge fund, REIT, and real estate managers. Since 2010, the sector has grown at 17% CAGR, outpacing the Singapore industry’s AUM’s 14% CAGR.
Please visit Asia Asset Management for more news
