Budget 2021: New Local Enterprises Funding Platform to have S$1b available for investments

Nisha Ramchandani

Published Tue, Feb 16, 2021 · 03:51 PM

Singapore Budget 2021

The government will set aside S$500 million for a funding platform - to be co-invested with state investment company Temasek Holdings - to invest in large local enterprises (LLEs).

In announcing the Local Enterprises Funding Platform in his Budget Speech on Tuesday, Deputy Prime Minister and Finance Minister Heng Swee Keat said Temasek will match the government's funds on a one-for-one basis, taking the funds available for investments to S$1 billion. The platform will be managed commercially.

"The platform will invest in non-control equity and mezzanine debt of selected large local enterprises which are willing to work with the fund manager to pursue their next phase of growth," he added. Mr Heng highlighted that Singapore's LLEs have good fundamentals, as many have ventured abroad to expand over the years.

Mr Heng noted that, in the past, the government has partnered equity firms to provide growth capital for companies to transform and scale.

Efforts, however, were largely focused on small-and-medium sized enterprises with annual revenues of up to S$100 million as small firms - unlike larger enterprises - typically do not come under the radar of private equity players, he added.

Mr Heng said that changes in the global economic landscape and financial markets have made it harder for LLEs to attract private equity. This, he stressed, could translate to "missed opportunities" for companies with strong fundamentals to plug into new areas, as supply chains are reconfigured.