The Monetary Authority of Singapore is awarding $1 billion to leading global debt fund managers as part of broader plans to transform the city-state into a full-service private markets hub, said MAS Managing Director Ravi Menon.
“There are opportunities for personal credit to play a bigger role in Asian corporate finance, just like its private equity counterpart,” Menon said at the SuperReturn Asia conference in Singapore. Event organizers said around 1,500 private equity and venture capital investors have registered for this year’s conference, more than doubling the number of delegates at the last event in 2019, just before the pandemic ravaged the global economy.
As the global economy faces multiple headwinds, including a severe downturn, rising inflation, rising geopolitical tensions and heightened risks from climate change, Menon said private credit investors are well positioned to seize lending opportunities in Asia and globally. “Given that private debt is higher up in a company’s capital structure than private equity, the former may also offer investors better protection during a downturn,” he added.
MAS is making the funds available to private credit investors through its private markets program, which launched in 2018 with $5 billion in initial funding. Since then, around $2.2 billion has been awarded to private equity and infrastructure fund managers who have committed to expanding their assets under management in Singapore, with some citing their Lion City office as their regional headquarters.
“Singapore’s connectivity and ecosystem provides the perfect springboard for private equity and venture capital managers to capitalize on opportunities in Asia,” said Menon. “Singapore has political and economic stability, well-regulated financial markets, excellent transportation and digital connectivity, a pool of qualified talent and extensive trade links with ASEAN.”
In 2021, assets under management of private equity and venture capital firms in Singapore grew 42% to S$555 billion (US$394.4 million), according to MAS. As of June this year, there were 428 private equity and venture capital managers in Singapore, compared to 336 at the start of last year, it said.
The growing presence of private equity and venture capital investors in Singapore has spawned the growth of startups in the country. According to a study published in July by KPMG and HSBC, the city-state is home to about 12 unicorns and more than 9,300 startups, the most of any country in Southeast Asia. “To make private equity and venture capital investment opportunities more accessible, we now have private market platforms in Singapore like ADDX and CapBridge,” Menon said. “MAS is working on anchoring more such platforms here.”