MAS Allocates $1 Billion To Global Credit Fund Managers To Develop Singapore As Private Markets Hub

The Monetary Authority of Singapore is allocating $1 billion with top global credit fund managers as part of broader plans to transform the city-state into a full-service private markets hub, MAS Managing Director Ravi Menon said.

“There are opportunities for private credit to play a larger role in Asian enterprise financing just like its private equity counterpart,” Menon said at the SuperReturn Asia conference being held in Singapore. Event organizers said some 1,500 private equity and venture capital investors have registered for this year’s conference, more than double the number of delegates when it was last held in 2019, just before the pandemic wreaked havoc on the global economy.

With the global economy facing numerous headwinds including a severe downturn, surging inflation, rising geopolitical tensions and heightened climate change risks, Menon said private credit investors are well-placed to seize lending opportunities in Asia and globally. “Given that private credit is higher up in the capital structure of a firm than private equity, the former can also offer investors better protection during a downturn,” he added.

The MAS is earmarking the funds to private credit investors as part of its Private Markets Programme that was introduced in 2018 with an initial funding of $5 billion. Since then, about $2.2 billion have been allocated to private equity and infrastructure fund managers, which have committed to expand their assets under management in Singapore, with some designating their office in the Lion City as their regional headquarters.

“Singapore’s connectivity and ecosystem provides the perfect springboard for private equity and venture capital managers to capture opportunities in Asia,” Menon said. “Singapore has political and economic stability, well-regulated financial markets, excellent transport and digital connectivity, a skilled talent pool, and extensive trade linkages with ASEAN.”

In 2021, assets under management of private equity and venture capital firms in Singapore increased 42% to S$555 billion ($394.4 million), according to the MAS. As of June this year, there were 428 private equity and venture capital managers in Singapore, compared with 336 at the beginning of last year, it said.

The growing presence of private equity and venture capital investors in Singapore has spawned the growth of startups in the country. The city-state is home to some 12 unicorns and more than 9,300 startups, the most in any country in Southeast Asia, according to a study published by KPMG and HSBC in July. “To make private equity and venture capital investment opportunities more accessible, we now have private market platforms in Singapore such as ADDX and CapBridge,” Menon said. “MAS is working to anchor more such platforms here.”