Singapore Asset Management Report : 2022 in Review
Each year, Singapore’s Monetary Authority of Singapore (“MAS”) releases its annual Singapore Asset Management Report 2022 on the city-state’s Asset Management industry.
For the year ending 31st December 2022, the issued report is based upon data collected from 1,314 surveyed financial institutions, excluding direct government-related investments. The report aims to highlight key industry developments and key data points, as well as to provide a general outlook for the near future.
PDF version: Singapore Asset Management Report : 2022 in Review
Executive Summary
In 2022, Singapore’s asset management industry encountered a 10% drop in its total value, reaching around S$4.9 trillion. It is understood this drop in was reflective of worldwide economic challenges.
The count of licensed and registered fund management companies in Singapore rose from 1,108 in December 2021 to 1,194 by December 2022.
The combined value of Authorised and Recognised Collective Investment Schemes (“CIS”) in Singapore held steady at S$127 billion. Authorised CIS constituted S$73 billion, while Recognised CIS accounted for S$54 billion.
- 55% of the AUM had an ESG component.
- 281 asset managers reported offering ESG strategies.
- Despite tough market conditions, there was stable inflow of funds YoY, totalling S$435 billion.
- Within the Asia Pacific region, 20% of the AUM was invested in Southeast Asia.
Singapore continues to be a sought-after centre for global asset managers and investors, with 76% of the assets under management (“AUM”) in Singapore coming from outside the country and 88% of this AUM invested in assets outside of Singapore’s borders. With 52% discretionary management arrangements, Singapore remains a choice location to base key decision makers.
During a market correction affecting asset values, the growth of private equity and venture capital slowed to 0.3% year-on-year (“YoY”). These sectors reported a combined total reserve of S$95 billion available for investment. Meanwhile, hedge fund assets remained stable as global hedge fund managers expanded to Singapore to grow their business.
Singapore saw continued interest from global and regional asset managers seeking to establish offices here to tap into regional opportunities.
The Singapore Funds Industry Group (“SFIG”) works with industry stakeholders to bolster Singapore’s position as a global asset management and fund domiciliation centre. SFIG aims to achieve three broad goals:
- Enhancing asset management industry capabilities:
- By developing governance standards for fund directors
- Building capabilities in emerging areas such as ESG
- Leveraging distributed ledger technology for improved efficiency:
- Developing industry-wide investment funds settlement tools
- Exploring usage of VCC on digital asset networks
- Raising Singapore’s status as a hub for fund domiciliation:
- By engaging global asset managers for fund directors
- Collaborating with the asset management industry
Singapore also experienced an increase in Variable Capital Companies (“VCCs”), with 969 being incorporated or redomiciled. These VCCs represent 1,995 sub-funds managed by 544 regulated fund management companies.
Additionally, more than 250 fund service providers, including lawyers, tax advisors, corporate secretaries, fund administrators and fund directors, support and advise the thriving funds ecosystem.
Conclusion
The projected growth in AUM for 2023 is envisaged to be with caution, given the challenges arising from increasing geopolitical tensions, conflicts, market fluctuations, and disruptions in supply chain which continually exert pressure on valuations and impact investor sentiments.
Nevertheless, MAS intends to bolster international capital movements to increase Asia’s development and to meet the financing goals of transitioning to a net-zero carbon economy.
