Fund managers turn to AI players poised for SGX listing
Despite such opportunities, price discovery remains a challenging topic for many investors
[SINGAPORE] Fund managers are increasingly focused on funding artificial intelligence (AI) players that could list on the Singapore Exchange (SGX) soon. These companies are seen as particularly attractive investment opportunities, said panellists at a session on how investors are navigating the next wave of initial public offerings (IPOs).
Shane Chesson, founding partner at venture capital firm Openspace Capital, highlighted that many AI talents from around the world are choosing Singapore to live and work in, and build “something great”.
Speaking at the OCBC x SGX Trailblazer Connect 2025 event on Thursday (Oct 23), he added that several companies coming through the ecosystem are taking advantage of that and selling into global markets.
Chesson hopes these companies can be convinced to stick around and list locally, considering the unique advantages Singapore offers, rather than listing overseas.
This, he said, presents an exciting challenge for private markets to ensure these companies “get funded” and “don’t leave too early”. He added that banks can also work together to promote attractive, fairly priced deals locally to discourage early exits.
Merrill Tan, director of equity research and global technology, media, telecommunications equity analyst at investment manager AR Capital, echoed these sentiments. He noted that his firm has been investing in the global generative AI ecosystem for several years, from semiconductors to data enablers and AI applications.
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Tan added that the firm’s Singapore equity coverage is led by global sector specialists, who are able to analyse these companies within a broader global narrative.
As interest in AI continues to grow, panel moderator Lin Hanwei, managing director for global investment banking at OCBC, noted the potential for SGX to leverage this to bring exciting AI players to list here.
Chesson noted that focus is shifting towards AI implementation, which entails using AI to enhance customer service, reduce costs and improve cash flow – a trend rapidly gaining momentum across South-east Asia.
He explained that the region is benefiting from significant capital expenditure and technology development. This has led to many companies built over the past decade now leveraging AI to drive profit and loss, resulting in faster growth and better profitability.
Chesson expects these companies to begin listing on the SGX over the next few years. From a buy-side perspective, he emphasised that it was not just about selling these opportunities to the market, as he also planned to invest in some of these companies directly on a public or private stage.
His firm launched the Orbit Listed Growth Fund last month, intending to tap the Monetary Authority of Singapore’s Equity Market Development Programme (EQDP) and get companies to list on the SGX. It includes companies with a strong AI angle, Chesson previously told BT.
Tan added that while generative AI has the potential to be highly impactful for enterprises, it has significantly altered the cybersecurity threat landscape. As a result, data management and data security are becoming increasingly important. He said that companies directly exposed to these themes may be interesting from an investment perspective.
Despite such opportunities, Han noted that price discovery remains a challenging topic for many investors. In his work with potential SGX IPO candidates, he noted a struggle with valuation expectations.
Valuation
Han asked panellists whether Singapore investors were still relying on traditional valuation methods rather than adopting newer approaches more common in markets such as the US.
Tan believes investor confidence in Singapore has not reached the level necessary for a shift to less traditional ways.
“Sustainable growth is on top of mind” when Singapore-based investors look at valuation methodologies, said Kenneth Tang, senior portfolio manager for Asian equities at Amova Asset Management. He explained that, whether assessing price-to-growth, enterprise value, Ebitda (earnings before interest, taxes, depreciation and amortisation), or any sales-related metrics, embedding sustainability is essential as it is a “longer-term lens into profitability”.
Nevertheless, Kenneth Ong, portfolio manager for Asian equities at Lion Global Investors, believes the narrative around valuation metrics could change.
He noted that most companies listed in Singapore over the past 20 to 30 years fell into two broad categories: those benefiting from asset liquidity such as real estate, and system integrators such as shipyards and property developers.
System integrators, specialising in project management, typically have gross margins of 20 to 30 per cent.
However, Ong sees emerging sectors such as AI and biotechnology bringing about new challenges, including issues of national sovereignty, since these technologies are often connected to matters of strategic importance.
This makes Singapore’s position as a “geopolitically neutral venue” – where capital and talent can move freely – particularly attractive.
Companies in these sectors have the potential to own their customers, build platforms and scale rapidly. This approach, Ong noted, is very different from the traditional system integrators and asset-heavy companies commonly listed in Singapore.
He believes that once investors recognise such companies that own platforms and customers, valuation metrics will evolve to better reflect their scalability.
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