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Singapore's assets under management up 7% to hit S$2.7t last year

SINGAPORE continues to be a vibrant and leading international fund management centre, with its assets under management (AUM) expanding last year on the back of a global recovery in the industry.

According to the results of the Monetary Authority of Singapore's (MAS) annual industry survey, released on Tuesday, Singapore's AUM in 2016 rose by 7 per cent to S$2.7 trillion, the growth reflecting global industry's increase.

The island republic's growth was supported by sustained net fund inflows and broad-based improvements in market valuations. But the growth last year dipped slightly from the 9 per cent seen in 2015.

Alternative sector AUM, made up of hedge funds, venture capital (VC), and private equity (PE), which caters to institutional and ultra-wealthy clients; and real estate, grew by 17 per cent - still in line with global trends.

Traditional AUM, however, increased only modestly by 3 per cent.

Globally, AUM also grew 7 per cent to US$69 trillion compared to a one per cent rise in 2015. A good part of this expansion was due to valuations, as equity markets registered strong gains.

The survey found that passive funds and alternative assets worldwide continued the trend of growing faster than traditional assets at 14 per cent and 9 per cent respectively; and the pace of industry consolidation has also picked up as traditional asset managers look to scale and reap synergies.

The MAS said Singapore will continue to deepen its VC and PE capabilities and establish itself as a vibrant enterprise financing hub "to support the next generation of Asian growth companies".

The authority said it has been working with the industry to deepen the financing ecosystem for regional and local companies and will implement the simplified regulatory framework for venture capital managers by the end of 2017.

To further strengthen Singapore's position as "a compelling hub for both fund management and domiciliation activities", the MAS has consulted publicly on a proposed corporate and regulatory framework, Singapore Variable Capital Companies (S-VACC), to facilitate the incorporation and domiciliation of investment funds across traditional and alternative fund vehicles for both open-ended and close-ended funds.

MAS will be responding to the public consultation in fourth quarter of 2017 and targets to implement the S-VACC framework by 2018.

The MAS said asset managers are also increasingly leveraging technology and innovation across the value chain. It said the Institute of Banking and Finance (IBF) has revised its Fund Management Standards in the second quarter of 2017 to cover new sectors such as alternative investments and private equity, and incorporate skills beyond front office.

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