Alternative assets remain key driver of Singapore asset management industry in 2021: MAS

THE alternatives sector continued to serve as a key driver of Singapore’s assets under management (AUM) growth, propelling the city state to outpace the global asset management industry for 2021.

According to the Monetary Authority of Singapore’s (MAS) annual survey of asset management released on Friday (Oct 21), alternative AUM expanded 30 per cent year on year to reach US$0.9 trillion or S$1.23 trillion for all of 2021.

MAS noted that within the alternatives sector, growth of private equity (PE) and venture capital (VC) AUM was robust at 42 per cent and 48 per cent, respectively. PE managers reported S$90 billion of dry powder – capital that is contractually committed but undrawn – while VC managers reported some S$5 billion.

Meanwhile, the traditional retail segment reported an over 13 per cent year-on-year growth in AUM, where the size of Authorised Collective Investment Schemes (CIS) and Recognised CIS offered in Singapore grew at a five-year compound annual growth rate (CAGR) of 10 per cent to S$134 billion.

Authorised CIS and Recognised CIS stood at S$83 billion and S$51 billion, respectively.

Managed assets with environmental, social and corporate governance (ESG) overlay grew by 77 per cent year on year to make up a 58 per cent share of total AUM as the number of asset managers offering ESG strategies grew to 279 in 2021, from 240 the previous year.

MAS also highlighted a “vibrant Singapore funds ecosystem” with more than 600 variable capital companies (VCCs) incorporated or domiciled in the country as at Oct 14 this year, representing over 1,300 sub-funds and managed by 420 regulated fund management companies.

In all, Singapore’s total 2021 AUM was up 16 per cent on-year to S$5.4 trillion compared to the global AUM year-on-year growth of 12 per cent to US$112 trillion.

78 per cent of total AUM originated from outside the city state, with 90 per cent of total AUM invested into assets outside of Singapore.

SEE ALSO

65% of Apac institutional investors plan to raise ESG allocation in next 2 years; figure over 80% in Europe, US: PwC report

Citi Private Bank sees strong growth in family office business in Asia

Brave investors could reap double-digit returns from China equities, says Value Partners chief

Private market assets not immune from interest rate and inflation challenges

More

Within Asia-Pacific, 17 per cent of total AUM was invested in the region.

Discretionary AUM continued to take up more than half (51 per cent) of Singapore’s total AUM in 2021, which MAS says is in line with the trend of asset managers basing their key investment professionals and decision makers in Singapore.

Total AUM increase mainly came from net inflow of funds, where new net inflows contributed to 58.9 per cent or S$448 billion of the year-on-year AUM growth. Valuation gains made up the remaining increase.

Going forward, MAS expects full year AUM growth in 2022 to moderate due to investor caution amid geopolitical and macroeconomic risks.

“Notwithstanding this, we continue to see keen interest from global and regional asset managers to set up office in Singapore, and/or to designate Singapore as one of the key nodes of their global operations, to tap into the strong network of private wealth managers, family offices and institutional asset owners, as well as investment opportunities in Asia,” said the central bank.