Singapore's private credit push yields new investors, fund structures

The city-state's drive to become a regional hub for alternative assets over the past few years has encouraged interest from new kinds of investors and led to evolving products.
Singapore's private credit push yields new investors, fund structures

Family offices. Corporate treasurers. Open-ended private credit funds. 

These are just some of the new investor segments and product offerings coming into play as Singapore pushes to become a regional private credit hub.

“There is a much bigger ecosystem of private credit – and practitioners -- today in Singapore than ever before in the history of private credit,” Andrew Tan, APAC CEO of private markets specialist Muzinich & Co, told AsianInvestor.

The Asian private credit market has grown by almost 30 times in the past two decades, soaring to over $90 billion by June 2022 from only $3.2 billion in 2000.

Singapore is a signficant player in that growth; it has attracted almost every large player in private credit -- loans by non-bank entities to companies, which are not issued or traded in public markets -- over the past seven years.

Andrew Tan
Muzinich & Co

From Apollo and Blackstone to HPS and Oaktree, private credit managers have launched operations not only to fund-raise from Asia but also to build out investment teams and strategic partnerships with other managers.

While fund-raising was no doubt challenging in 2023, there's little doubt that the ecosystem for private credit players has developed rapidly.


Much of the credit goes to the Monetary Authority of Singapore (MAS), which among other initiatives, decided to allocate $1 billion to global private credit managers in 2022.

The initiative was part of MAS’s private markets programme, launched in 2018 and designed to burnish the city-state’s status as a regional private markets hub.

“That [MAS mandate for private credit] created the opportunities for these private asset entities to set up shop in Singapore,” noted BNP Paribas Asset Management’s Singapore CEO Angelia Chin-Sharpe.

A global pullback in bank lending due to tighter rules, the chase for higher yields amid a low interest rate regime in previous years, poor performance of public markets in recent years and rising incomes and wealth in Asia also played pivotal roles in the ascent of private credit.

Still, it was COVID-19 that turned the tide for Singapore, according to some experts.

“Hong Kong was the centre of gravity in the private credit space but after COVID-19, many entities decided they wanted to set up a Singapore satellite office or decided to move their entire operations to the city,” Muzinich’s Tan said.

“There has been a very strong buildup of the private credit community in Singapore in the past four years, and now Singapore seems more favoured than in the past,” Tan added, noting that now there is almost a 50:50 concentration of private credit practitioners in Singapore and Hong Kong.

A significant pullback in global liquidity to mainland China and Hong Kong has also prompted investors to find other investment outlets.

“Hong Kong will continue to be important but Southeast Asia, South Asia and Australia have been increasing points of interest for global investors,” said Tan.

“That has elevated Singapore as a regional hub because this is where the discussions on funding take place, whether they are looking to invest in Indonesia or India or the Philippines.”

Singapore is turning into a regional hub for funding discussions when investors want to invest across South and Southeast Asia. Image credit: Shutterstock


The boom in private credit is enabling several developments not seen in Asian markets earlier.

More wealth platforms have alternative assets on their product shelves, opening access to investors of different stripes.

Gregory Van

One such platform is Endowus, which is now at a point "where it can offer some of the best institutional grade private market strategies in the world to Asia for the first time," CEO Gregory Van told AsianInvestor.

“We have seen enormous growing interest in private credit and private equity distribution to a broader audience.”

The wealth platform, launched in 2018, caters to individuals as well as family offices, charities and endowments.


The growth spurt of private credit entities in Singapore comes not just from traditional institutional investors like insurers and pension funds, but increasingly from those who have never tried the asset class before, such as family offices.

Singapore has seen explosive growth in family offices, with more than 1,100 family offices at the end of 2022.

While family offices are one of the fastest-growing segments in Asia, the challenge is that the market segment is very fragmented, noted Kelvin Lee, co-founder and CEO of Alta, a digital alternatives marketplace.

“The traditional investor relations model or model of distributing funds, or even traditional private banking channels are not necessarily cost-effective," he told AsianInvestor.

Kelvin Lee

Alta (formerly Fundnel), headquartered in Singapore, has inked several partnerships across the region, including with multi-family office Rockpool Capital and Cachet Group in Hong Kong and private debt platform Kilde in Singapore to offer global alternative investment opportunities via its digital marketplace.

Family offices tend to be relatively impatient investors, and dislike parking capital in illiquid investments for long periods of time, so managers had had to tweak product specifications.

“You don’t see patient wealthy families anymore, or those who are first time limited partners (LPs), staying patient. They want the optionality of an exit when needed,” said Lee.

“More and more funds are thinking about opening up or structuring funds differently to mimic the risk-reward return required to trade off capital invested into these funds,” Lee added.

There has been an explosion of family offices being opening in Singapore.
Image credit: Shutterstock


The result – growing interest in open-ended and net-asset-value-market funds.

Other experts agree: “Over the next three to five years, we will see the launch of NAV-marked funds, or funds that are not close-ended. They will need to be marked-to-market on a monthly or quarterly basis. This will be a critical development for the industry,” said Endowus’s Van.

The way a fund manager manages the liquidity portion of the portfolio will become very important to managing the money, he added.

Open-ended private credit funds are appealing not just to family offices – even corporate treasurers are seeing merit in such investments, according to Alta.

“Corporate treasurers and small and medium enterprise owners have fixed deposits and from an investment point of view, an open-ended private credit fund works perfectly. This is a totally new segment of private credit fund investors that we never had before,” noted Alta’s Lee.

Alta, which also has operations in Malaysia, sees additional opportunities in the Islamic finance space, in particular, products catering to entities managing Hajj, or pilgrimage, funds.

"Another interesting trend is a general partner (GP) type index fund, where instead of a country fund, you take a stake in many GP funds to express your view on a region," added Alta's Lee.

Yet all of this is only the start of the region's efforts at developing the private assets industry. As Endowus's Van noted, "We are at the beginning stages of developing more private market offerings."

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