SINGAPORE’S assets under management (AUM) declined by 10 per cent to S$4.9 trillion in 2022 from S$5.4 trillion the year prior.

Based on the Monetary Authority of Singapore’s (MAS) annual update of the country’s asset management industry released on Thursday (Nov 2), this was in tandem with an overall decline in global AUM, and driven primarily by a fall in asset valuation.

Out of Singapore’s AUM for 2022, 76 per cent of funds were sourced from beyond the Republic, while 88 per cent of funds were invested into assets outside the country.

Discretionary AUM accounted for more than half, or 52 per cent, of total AUM in 2022.

This highlights Singapore’s attractiveness as a destination for asset managers to base their key investment professionals and decision makers in the country, said MAS.

Net AUM inflows were slightly lower at S$435 billion compared with S$448 billion in 2021. The central bank considers this performance “relatively steady” in view of a challenging market environment.

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Under alternative AUM, private equity and venture capital growth moderated to 0.3 per cent year on year, and reported a total contractually committed, but undrawn, capital of S$95 billion.

Hedge fund AUM increased 1 per cent as global hedge fund managers established a presence in the Republic to grow their businesses. 

Over 2022, Singapore saw continued interest from global and regional asset managers seeking to establish offices here to tap regional opportunities.

Total licensed and registered fund management companies in the country increased to 1,194 as at December 2022, from 1,108 as at December 2021.

In the traditional retail segment, Authorised Collective Investment Schemes (CIS) and Recognised CIS offered in Singapore stood at S$127 billion in aggregate, down from S$134 billion in the previous year.

Authorised CIS in 2022 stood at S$73 billion, while Recognised CIS stood at S$54 billion.

Among asset managers, managed assets with environmental, social and governance (ESG) overlay in Singapore constituted 55 per cent of total AUM. A total of 281 asset managers reported that they offer ESG strategies in 2022.

MAS expects AUM growth in 2023 to remain cautious as headwinds arising from geopolitical tensions and conflicts, market uncertainties and supply chain disruptions continue to weigh down on valuations and investor sentiments.

It, however, noted that interest from global asset managers and asset owners seeking to set up an office in Singapore remains strong, given the current asset management ecosystem.

The central bank said it will continue to intermediate international capital flows to support Asia’s growth and net-zero transitional financing needs.