SINGAPORE: Fund managers in Singapore saw a 9 per cent increase in assets under management to S$2.6 trillion last year, buoyed by growth in the alternative asset sector, the Republic’s central bank said yesterday.
The 9 per cent growth is slower than the pace recorded in 2014, when assets under management increased by 30 per cent. Assets under management (AUM) at alternative asset managers grew 29 per cent to S$410 billion, while traditional asset managers saw their AUM increase by a more modest 4 per cent, the central bank said.
“These trends illustrate the crossroads facing the asset management industry: Interest rates, which have been low for several years, look likely to remain lower for longer.
“This continues to have implications for yields and cost, and the industry needs to re-think how it can balance between investor demands for stable returns net of fees,” the Monetary Authority of Singapore (MAS) said in its annual survey of asset managers.
“As public market returns disappoint, more investors are seeking excess returns from illiquidity and credit risk premia in private markets. This has caused managers to search for new sources of value to deploy capital.” Within the alternative sector, private equity/venture capital AUM rose 47 per cent to S$136 billion, while real estate AUM grew 80 per cent to S$69 billion.
AUM of hedge fund managers grew by 11 per cent to S$119 billion, while real estate investment trust (REIT) managers saw their AUM expand by 7 per cent to S$85 billion, MAS said.
The report also showed that 80 per cent of total AUM last year was sourced from outside Singapore, “demonstrating Singapore’s role in serving regional and international investors”. Of the AUM sourced from outside Singapore, 56 per cent was from the Asia-Pacific, 18 per cent from North America and 17 per cent from Europe.
The AUM data follows reports that close to US$6 billion (S$8.2 billion) worth of assets have been repatriated to Indonesia from Singapore under the former’s tax amnesty programme, raising questions about the potential impact on the city-state’s wealth management sector and its status as a financial hub.
Industry experts TODAY spoke to previously, however, have said that the US$6 billion figure is not large in wealth management terms, and therefore, any impact on Singapore would be minimal.
Indonesia’s director-general of taxes Ken Dwijugiasteadi said on Monday that the country has pulled in about US$10.5 billion in previously undeclared assets, out of an estimated US$273 billion, in the first three months of the tax amnesty programme.
