Singapore's alternative investment industry is alive and kicking

SINGAPORE'S alternative investment fund industry continues to evolve and grow amid on-going regulatory change, constructive government support and increased allocations from sophisticated local and international investors.

The hedge fund sector grew by 16 per cent last year to S$138 billion in assets under management (AUM), according to the Monetary Authority of Singapore's recently published asset management survey. This makes hedge funds the second-largest alts sector in the city today after private equity, which grew 14 per cent to S$152 billion in assets. Significantly, the MAS survey also highlighted that investor allocations to alternatives funds - much of it sourced from international investors - are growing more rapidly than those to long-only funds.

Institutions such as pensions and sovereign wealth funds continue to look to the sector as a provider of diversification and downside protection. Private wealth managers and private banks also are seeking to diversify their investments and are increasingly looking at hedge funds as well as real estate and other alternative investments.