Collectively, hedge funds and PE/VC accounted for two-thirds of the total alternative AUM in Singapore.ĩ. At the same time, our alternative AUM continued to grow faster than the overall industry AUM, at 30% year-on-year Source: Singapore Asset Management Survey 2021. Against this landscape, Singapore’s AUM grew 16.4% Source: Singapore Asset Management Survey 2021 in 2021 to reach US$4 trillion Source: Preqin, faster than the global AUM growth of 12% Source: Singapore Asset Management Survey 2021. And demand for alternative investments will continue to be driven by diversification from the public markets, and the search for alpha.ĪLTERNATIVE INVESTMENT INDUSTRY IN SINGAPOREĨ. This is higher than the projected CAGR of 4 to 6% Source: BCG and PWC Industry Report for the global asset management industry. According to Preqin, the alternative investment industry AUM is forecasted to grow at a CAGR of 9.3% Source: Preqin from 2021-2027. This is in terms of both AUM growth and performance. Despite the mixed showings, the alternative investment industry as a whole has remained relatively resilient.
Total private credit AUM grew 12% Source: Preqin to about US$1.4 trillion in 2022.ħ. Fundraising for private credit funds finished the year on a strong note, surpassing US$200 billion Source: Pitchbook for the third consecutive year. On the other hand, private credit maintained its momentum. The aggregate value of private equity exits globally was down 32% Source: S&P Global Market Intelligence in 2022.Ħ. Higher interest rates have led to lower valuations and slower deal activities. In the private markets, the stimulus-fuelled market of 2021 has turned slightly less sanguine. So there remains opportunities to generate good returns with hedge fund strategies even in turbulent markets.ĥ. While the HFRI 500 Event driven and Equity driven indices underperformed in the range of -6% to -13% Source : Hedge Fund Research, the HFRI 500 Macro Index surged 14.8% Source : Hedge Fund Research, mainly driven by fundamental and trend following commodity and quantitative strategies. Drilling in deeper, hedge fund performance was mixed across different strategies. On the whole, the performance of hedge funds fell 4.2% Source : Hedge Fund Research in 2022 according to the HFRI 500 Fund Weighted Composite Index. Amid this operating environment, the performances were mixed for alternative asset managers. However, they face the challenge of navigating a narrow path at the intersection of price stability and financial stability.Ĥ. Central banks around the world have taken swift actions to mitigate the contagion risk. The recent concerns over the health of US regional banks, the loss of confidence in Credit Suisse and their potential contagion on the broader banking system are stark reminders of fragility in the global financial system. And climate change remains a clear and present danger that will affect returns in the longer term. Geo-political fragmentation will increase risks and volatility of returns in the medium term. Inflation remains a challenge in the short term. Enter 2023, and the conditions have gotten even tougher. Global equities and bonds fell between 16 to 20%.ģ. The business environment was fraught with global geopolitical uncertainties, inflationary pressure, and rising interest rates after a prolonged period of easy monetary policy. Last year, the financial markets were challenging. It is my pleasure to join all of you again this year.Ģ. Thank you for inviting me to the AIMA Singapore Annual Forum. Lee Kher Sheng, Managing Director, Co-head of APAC and Deputy Global Head of Government Affairs, AIMAġ. Michael Bugel, Managing Director, Co-head of APAC, AIMA
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