Govt, Temasek Holdings set up $1.5b fund to help high-growth tech firms seeking to list in S'pore

The SGX will launch a Strategic Partnership Model to develop tailored solutions ranging from private market fund-raising to boosting liquidity for high-growth companies. PHOTO: ST FILE

SINGAPORE - The Government unveiled a package of initiatives on Friday (Sept 17) to attract high-growth, high-tech local and regional companies to list on the Singapore Exchange (SGX).

The biggest initiative is the setting up of a fund, dubbed the Anchor Fund @ 65, with an initial tranche of $1.5 billion, that will assist promising high-growth companies raise capital through public listings here. The Government and Temasek Holdings will co-invest in the fund.

A high-growth company usually generates significant positive cash flow, which increases at a faster pace than the overall economy. However, they typically pay little to no dividends to stockholders, opting instead to put most or all of the profits back into its expanding business.

The Growth IPO Fund is another of the initiatives, this one focuses on late-stage private enterprises that are two or more funding rounds away from a listing. It will help them grow and prepare for an eventual initial public offering (IPO) here.

This IPO fund - with an initial tranche of $500 million - will be set up by EDBI, the investment arm of the Economic Development Board, and will mainly focus on future market leaders and technology innovators.

The Monetary Authority of Singapore (MAS) will also enhance its Grant for Equity Market Singapore (Gems) scheme, introduced in early 2019, to increase its support of companies seeking to list and to further develop Singapore's equity research ecosystem.

The SGX on its part will launch a Strategic Partnership Model to develop tailored solutions ranging from private market fund-raising to boosting liquidity and global investor outreach for high-growth companies.

Speaking at the SGX's Securities Market Open event on Friday morning, Minister for Trade and Industry Gan Kim Yong said Singapore will make a concerted push to establish itself as the listing destination of choice for local and global market leaders, especially from high-growth and high-tech sectors.

"In the coming years, many Singaporean and Asian companies in high-growth, high-tech sectors will come of age and seek to list on public markets. We should strive to anchor these companies in Singapore," he said.

Expanding on the initiatives, Mr Gan said the Anchor Fund @ 65 will be managed on a commercial basis by 65 Equity Partners, a new and wholly owned investment platform of Temasek.

65 Equity Partners will also manage the $1 billion Local Enterprises Fund @ 65, which was announced in this year's Budget to help large local enterprises transform, expand and scale.

Both the Anchor Fund @ 65 and Local Enterprises Fund @ 65 will have access to Temasek's strong network and deep expertise and will be well positioned to help portfolio companies grow and flourish from founding to listing, the minister said.

The Gems listing grant, which helps to defray listing costs, will have its cap increased from $1 million to $2 million to better support listings of unicorn companies in Singapore. The grant will also be expanded to support listings by special purpose acquisition companies (Spacs).

To facilitate price discovery and boost trading liquidity, MAS will expand the Gems research talent development grant to co-fund hiring costs of research talent for two years, up from the earlier cap of one year.

"We know that the initiatives we are launching today are no magic bullet. But we believe they will blow new wind into the sails of our public equity market and make SGX not just a viable but a compelling option for innovative growth companies."

Mr Gan said the package was not just for the sake of having high valuations or market cap.

"It is to give the most promising start-ups and entrepreneurs from Singapore and across the region another engine of growth, and to allow them to stay rooted here as they ride the wave of opportunity globally."

Minister for Trade and Industry Gan Kim Yong (right) speaking at the SGX's Securities Market Open event on Sept 17, 2021. PHOTO: MINISTRY OF TRADE AND INDUSTRY

A joint statement by the Ministry of Trade and Industry, the MAS and Temasek said the initiatives will enhance Singapore's attractiveness as a destination for capital raising by local and regional enterprises.

SGX chief executive Loh Boon Chye noted: "There are many Asian and home-grown companies which are at the cusp of global success."

The initiatives will build on recent SGX efforts to strengthen its trading platform, connectivity and its range of fund-raising options, including dual-listing collaborations with overseas exchanges and the launch of the Spacs framework.

"This inter-agency initiative further sets Singapore apart as a capital markets hub and is a first of its kind within the region that ensures success for market leaders through deep collaboration between public and private sectors," said Mr Loh.

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