Singapore's asset management industry bucked a downward trend for the global industry in 2018 on the back of strong net inflows for alternatives segments such as private equity, venture capital and real estate, according to the Monetary Authority of Singapore's latest annual survey of asset managers in Singapore.
The central bank's survey of 787 registered and licensed fund managers in Singapore showed a 5.4% increase in combined assets under management for the latest year to S$3.44 trillion ($2.5 trillion), even as global AUM — according to a Boston Consulting Group report — slipped 4%.
The MAS report said 15% growth for alternatives strategies — covering private equity, hedge funds, real estate investment trusts, real estate and venture capital — in 2018 to S$646 billion more than offset a 7% drop in traditional AUM resulting from market declines.
Toward the end of 2018, MAS introduced several initiatives to bolster the growth of Singapore's private markets segment, including a program to "place up to $5 billion" with private equity and infrastructure managers committed to either establish a significant presence in Singapore or deepen an existing presence. Between the program's launch in November 2018 and March 2019, just more than $550 million of that war chest had been deployed, the report said.
The broader industry's 5.4% gain in AUM for the latest year, while evidence of the resilience of Singapore's money management sector, nonetheless marked a sharp slowdown from the 14% annualized growth of the past five years.
But in other healthy signs, the MAS report noted that discretionary AUM, with Singapore-based professionals making investment decisions on behalf of clients, rose to 58% of the total AUM in 2018, from 53% the year before.
Meanwhile, an additional 72 fund management firms were registered and licensed in Singapore by the end of last year, an increase of roughly 10% from the year before.
Net inflows for the year came to S$166 billion, reflecting what the MAS report termed "favorable demand for Asian investment strategies." While down roughly 25% from the previous year's net inflows, that decline was relatively modest compared to the 57% plunge in global net inflows to $944 billion, the report said.