Singapore assets under management up 10% to $5.4 trillion in 2023; new debt issues rise 21%

SINGAPORE – Singapore’s financial sector had a good showing in 2023, with a 10 per cent growth in assets under management (AUM) to $5.41 trillion as at Dec 31, 2023. The corporate debt market also grew strongly, with new issuances rising 21 per cent to $230 billion in 2023.

Private markets have also grown strongly over the years.

Singapore’s financial sector remained resilient in 2023, with good progress across the board, Mr Chia Der Jiun, managing director of the Monetary Authority of Singapore (MAS), said on July 18.

AUM growth in the Singapore asset management industry was in line with the 10 per cent compounded annual growth rate (CAGR) over the past five years.

Notably, private markets grew significantly over the years, Mr Chia said. Singapore’s private equity and venture capital AUM grew at a CAGR of 24.6 per cent to more than $650 billion from 2018 to 2023.

Over half of these assets were directed towards supporting the growth of businesses in the Asia-Pacific region.

Mr Chia expects private credit to continue to grow as large global private credit managers expand their Asia teams in Singapore and new private credit managers establish their presence here to tap the region’s investment opportunities.

In the Singapore Asset Management Survey 2023 also released on July 18, MAS noted that Singapore’s AUM growth is faster than the AUM growth in Asia of 8 per cent. Global AUM growth stood at 12 per cent on the back of gains in global bonds and equities after a challenging 2022.

Singapore is a key gateway for global asset managers and investors to tap the region’s growth opportunities, with 77 per cent of AUM sourced from outside Singapore, and 89 per cent of total AUM invested outside the country.

Yet, net AUM inflows fell in 2023 to $193 billion, the lowest since 2018. MAS said this reflects the challenges faced by asset managers in raising funds and managing monies, amid continued market volatility in public markets and investors’ caution.

Meanwhile, Singapore’s corporate debt market rebounded strongly amid increased financing needs from global corporates to fund business expansion despite high interest rates.

The outstanding size of the market registered a 10.5 per cent increase to $566 billion.

The insurance sector also continued to grow in 2023, with net premiums increasing by 6.4 per cent and total assets for the overall insurance sector up by 6.8 per cent.

Improving resilience of service delivery

MAS plans to further sharpen the financial institutions’ focus on resilience of service delivery.

It will consult on enhancing the requirements set out in its notice on technology risk management, with the intention for financial institutions to take a service-centric recovery time objective and not just a system-centric recovery time objective.

Financial institutions also need to identify and address single points of failure in critical business services, and fully test their recovery plans through an annual exercise to ensure that they are able to operate from their disaster recovery site for a prescribed minimum time period.

MAS will also consult on instituting a technology assurance programme for financial institutions that are core to Singapore’s financial system.

Mr Chia also noted that financial services have achieved a high level of digitalisation in recent years. Almost all Singaporean adults have registered for PayNow, which had a total transaction value of $94 billion in 2023.

Almost all merchants have also registered for SGQR payment, with 300,000 SGQR payments acceptance points for consumers to make payments. THE BUSINESS TIMES