MAS unveils US$5b fund for private equity and venture capital investments

SINGAPORE – The Monetary Authority of Singapore (MAS) will place US$5 billion with locally based fund managers who invest in private enterprises and infrastructure projects.

The move announced on Tuesday (Nov 13) is aimed at capturing some of the value that is increasingly being generated by companies operating in the private sphere as opposed to publicly listed firms.

The funds will be placed with managers who commit to bolstering their presence here or who undertake to establish a significant local footprint.

MAS board member Peter Ong told the Singapore Fintech Festival on Tuesday (Nov 13) that the new programme will build on the success of an MAS one that is centred on public markets.

Mr Ong, who is also Enterprise Singapore chairman, added that the public markets initiative “has anchored global asset managers in Singapore and catalysed the growth of our asset management industry”.

The new fund’s focus on private markets reflects the striking growth in this sector, fuelled in part by more companies preferring to go it alone rather than listing on share markets.

Mr Ong cited a recent private equity report by consultants Bain & Co on the Asia-Pacific region which noted that assets managed by around 220 private equity and venture capital managers based in Singapore have grown at a compound annual rate of 28 per cent to reach $190 billion over the past five years.

About 85 per cent of their investments are in Asia.

Mr Ong said: “(The trend) suggests investors’ increased awareness of Asean’s strong investment potential. Singapore stands to ride the momentum of these developments in the private markets space.”

Globally, private equity and venture capital investments into Asia overtook Europe for the first time last year (2017).

The Bain report also found that investments into Asia grew 40 per cent last year to reach US$160 billion, comprising 28 per cent of global investments, while fundraising in Asia rose 6 per cent to US66 billion.

Mr Ong said private equity and venture capital investments in South-east Asia are expected to remain robust given a growing need of capital to finance expansion of high-growth companies, firms staying private longer and the region’s immense infrastructure needs.

“There is now… greater recognition among Asean companies that private capital is not simply just another source of funds, but (it) also … comes with technology, business know how and networks useful to companies to grow and scale,” he added.

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