According to MAS Managing Director Ravi Menon, the Monetary Authority of Singapore is investing $1 billion with leading international credit fund managers as part of larger efforts to make the city-state a centre for full-service private markets.
Menon remarked at the SuperReturn Asia conference being held in Singapore: “There are opportunities for private credit to play a larger role in Asian enterprise financing just like its private equity counterpart.” The number of attendees at this year’s conference, 1,500 private equity and venture capital investors, is more than double that of the previous conference, which was held in 2019, right before the pandemic wreaked havoc on the world economy.
Menon stated that private credit investors are well-positioned to take advantage of lending opportunities in Asia and around the world given the numerous challenges the global economy is facing, such as a severe downturn, surging inflation, rising geopolitical tensions, and increased risks related to climate change. Private credit can provide investors with stronger protection during a downturn than private equity because it is higher up in a company’s capital structure, he continued.
In order to support its Private Markets Programme, which was launched in 2018 with initial financing of $5 billion, the MAS is allocating the money to private credit investors. Since then, over $2.2 billion has been given to private equity and infrastructure fund managers, who have pledged to increase the number of assets they manage in Singapore. Some of these managers have even made their Singapore offices their regional headquarters.
“Singapore’s connectivity and ecosystem provides the perfect springboard for private equity and venture capital managers to capture opportunities in Asia,” Menon said. “Singapore has political and economic stability, well-regulated financial markets, excellent transport and digital connectivity, a skilled talent pool, and extensive trade linkages with ASEAN.”
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