SINGAPORE: Total assets managed in Singapore grew 9% on year to touch 2.6 trillion Singapore dollars (US$1.9 trillion) in 2015, with weak market gains driving investors toward riskier alternative investments, according to data published Wednesday by the city-state’s central bank.
The growth, though solid, was a falloff from the unusual 30% bump to US$1.8 trillion that Singapore saw in 2014, driven by investors returning to Asia after fleeing in a period of market selloff colloquially known as the “taper tantrum.”
Singapore’s performance was in line with the 10% growth in Asia’s asset-management industry in 2015, according to figures published earlier this year by the Boston Consulting Group.
Singapore-based asset managers saw net inflows of S$203 billion last year, with much of this steered to private markets, led by private-equity firms, venture capital and real estate, according to a survey conducted by the country’s central bank, the Monetary Authority of Singapore. Total alternative assets under management expanded 29% from a year earlier to S$410 billion. The Monetary Authority of Singapore said that with returns from more basic investments proving disappointing, more investors were turning to alternative bets.
Meanwhile, traditional assets rose a meager 4%, hurt by a combination of low interest rates globally and high valuations for equities. Several large funds, including Singapore sovereign-wealth fund GIC Pte., have warned of lower returns from traditional assets in the coming years as a result of this dynamic and are seeking greater exposure to investments in property and private equity. The central bank also said that overall growth in 2015 had been driven almost entirely by new assets under management, rather than capital appreciation.
Singapore is a major financial center for Southeast Asia, and hosts the regional investment-banking and private-wealth-management operations of many large Western banks, including Credit Suisse AG, Citigroup Inc., Deutsche Bank AG, and J.P. Morgan Chase & Co.
The global asset management industry last year recorded its worst performance since the 2008 global financial crisis, growing just 1%. But Asia bucked the trend with the help of private wealth and several fast-growing economies. According to Boston Consulting Group, Singapore banks held $1.1 trillion in offshore private wealth in 2014.
Foreign investors are drawn by Singapore’s strong rule of law, respect for banking secrecy and low tax rates.
