singapore assets under management grew 30 in 2014 to 2 4t 1087292015

Singapore will continue to be a mecca for international funds given foreign investors’ attraction for Asia

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By :  ,  Financial Analyst

The Monetary Authority of Singapore (MAS) released Thursday its 2014 Singapore Asset Management Survey, which covered 735 participants drawn from institutions such as banks, capital market services licensees, REIT managers, financial advisors and insurance companies.

In a testimony to its allure as an investment destination, Singapore’s assets under management showed solid growth of about 30% in 2014, rising to $2.4 trillion, the highest since 2009, at a 5-year CAGR of 14%.

Traditionally managed assets grew 38%, while funds for alternative strategies rose 17%.

“The robust growth was derived largely from positive asset inflows arising from Asia’s growth dynamism and Singapore’s position as a pan-Asian asset management hub,” MAS said.

In an analysis of the source of destination, the MAS found that about 81% of AUM is from outside Singapore. On the other hand, data on investment destinations showed that 68% of funds were invested in the Asia Pacific region.

An analysis of the alternative AUM showed that private equity AUM of $93 billion grew 24% in 2014, the highest within the category followed by hedge funds which grew 21%. This category has grown at a CAGR of 28% over the last five years.

“Eight of the top ten global PE firms have an office in Singapore. PE firms have used Singapore as a base to scout for investment opportunities in the Asia-Pacific,” MAS said. “Top investment destinations last year included India, China, ASEAN, Australia and New Zealand.”

“Investors’ risk return expectations have evolved,” MAS observed. “For instance, the low yield environment has contributed to an increasing popularity of multi-asset or outcome-oriented strategies.” Investment in the alternatives asset class grew from 14% of AUM in 2013 to 15% in 2014, while equities garnered 50% in 2014 compared to 47% in 2013.

On the outlook for the future, MAS said that the industry's growth opportunities abound as Asia's economic development will continue to be attractive to international investors.

However, the challenge for fund managers is to keep abreast of the “shifting sands” of industry dynamics and overcome challenges or seize opportunities.

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