Since the early 1990’s when Singapore’s then Prime Minister, Mr. Lee Kuan Yew began transforming the financial services sector to make it more attractive to investors and managers, Singapore has become a financial force to be reckoned with. There are several factors, including its stable political environment, strong regulatory framework, attractive tax regime, and well-developed financial infrastructure that contribute to this success. The government has also been proactive in promoting Singapore as a hub for asset management, offering various incentives such as tax breaks and grants to encourage the growth of the industry.
Singapore's strategic location in the Asia-Pacific region makes it an ideal base for investors and managers looking to tap into the region's rapidly growing economies. The city-state's proximity to China, India, and Southeast Asia provides investors with access to a large pool of potential investment opportunities.
Singapore has a highly skilled workforce and is home to many leading universities, research institutions, and financial institutions. This talent pool has helped to establish the city-state as a center of excellence for finance and asset management.
Growth in private markets AUM
In the past 5 years, Singapore has seen a large growth in assets under management, some of which can be attributed to a huge growth in the alternatives sector, private equity, venture capital, hedge funds, real estate and real estate investment trusts.
The Monetary Authority of Singapore (MAS) highlighted that "Within the alternatives sector, growth of private equity and venture capital assets under management was robust at 42% and 48% respectively,".
Areas of focus
But what are the main areas of focus for the Singapore investment sector now:
- The rise in private markets investments drives the need for asset allocators to have greater transparency across VCs, PE GPs and portfolio companies. We outline what questions to ask private equity GPs when conducting due diligence in one of our earlier blog posts.
- As with the rest of the world, ESG is moving to the top of the priority list for asset allocators and managers in Singapore. The recently launched ESG Impact Hub, a new entity that seeks to promote collaboration on ESG finance was developed by the MAS with 15 founding member organizations. The launch comes shortly after the Singaporean government announced a roadmap to becoming a global leader in green finance and sustainable fintech. If asset allocators and managers are going to make significant progress with ESG related issues, benchmarking and monitoring data will be essential. Dasseti Collect for ESG is a one to one data collection tool that can be used to aggregate hard to find data points from private equity GPs or portfolio companies.
- Singapore is leading the digitization wave and has close links between the finance and fintech sectors. MAS and firms across the sector recognize that digitization is essential for increasing efficiencies, enabling better investment decision making, reducing risk and adding a competitive edge. By digitizing the due diligence process with our AI enabled platforms, asset allocators can scale their due diligence operations, save hundreds of man hours and improve risk management processes.
- Digital assets are becoming more popular in the region but come with a particular set of challenges. The due diligence approach can be adapted using Dasseti Collect, which allows clients to access the latest DDQ for Digital Assets from AIMA. https://www.aima.org/compass/ddqs/digital-assets-ddq.html
- Talent recruitment and retention in the investment sector is always an issue, even with Singapore’s excellent universities and thriving financial centre. Teams that are equipped with software that is easy to use and helps them achieve more, with less hard work, are more likely to stock around. Dasseti’s research and due diligence teams report happier staff and more productive outputs.
If you are an asset allocator in Singapore and would like to digitize your Operational Due Diligence, Investment Due Diligence or manager monitoring, speak to the Dasseti team today and ask to see a demo of Dasseti Collect.