Markets, Singapore

Singapore’s Asset Management Industry Crosses S$6.7 Trillion as MAS Moves to Defend Its Edge

Fresh inflows and a rebound in traditional assets pushed the city state’s fund industry to a record high in 2025, even as regulators quietly work on measures to stop managers looking elsewhere.

Singapore’s asset management industry closed out 2025 in a stronger position than most had expected a year earlier. Total assets under management rose 10.1 per cent to reach S$6.7 trillion, according to the latest survey from the Monetary Authority of Singapore, and the gains were broad enough to reach nearly every corner of the industry rather than being carried by a single strategy or asset class.

Much of the increase came from traditional assets such as listed equities and bonds, which grew around 9 per cent over the year on the back of firmer markets and steady portfolio inflows. Alternative assets, covering private equity, venture capital, hedge funds, real estate and REITs, grew more modestly at 0.4 per cent. Hedge funds and REITs did the heavy lifting within that category. Private equity and venture capital growth was held back as a wave of new managers entering the market offset the downsizing of one large existing player, while real estate AUM slipped further as valuations stayed compressed and investor appetite cooled.

Net inflows told an even more encouraging story for the industry. Singapore pulled in S$376 billion in net new money over the year, a 29 per cent jump from 2024, driven largely by a rise in new investment mandates being won and managed out of Singapore rather than simply booked through it.

A hub built on money from elsewhere, for markets elsewhere

The numbers underline something that has been true of Singapore’s fund industry for years and is becoming even more pronounced. This is a hub that manages other people’s money for markets far beyond its own shores. Around 76 per cent of the assets managed in Singapore originated from outside the country, with 39 per cent coming from the rest of Asia Pacific. On the other side of the ledger, 88 per cent of total AUM was invested outside Singapore, with 40 per cent going into Asia Pacific markets excluding Singapore itself.

Discretionary mandates, where portfolio managers make day to day investment calls on behalf of clients rather than simply executing instructions, accounted for more than half of total AUM. MAS pointed to this as evidence of the depth of investment talent now based in the country, arguing that Singapore is not just a booking centre but a genuine base for investment decision making.

The VCC framework keeps gaining ground

Singapore’s Variable Capital Company structure, introduced to give fund managers a flexible, purpose built vehicle for pooling and running investment strategies, continued its steady climb. By the end of 2025, a total of 1,406 VCCs had been incorporated or re-domiciled into Singapore, representing 3,443 underlying sub funds. More than half of all regulated fund management companies in the country now use the structure in some form, a sign that the VCC has moved from a novel option to a mainstream part of how funds are built here.

Discretionary mandates made up more than half of total AUM, a detail MAS used to argue that Singapore is a genuine centre for investment decisions, not just a booking location for assets managed elsewhere.

Why MAS is not simply celebrating the numbers

Strong as the headline figures are, the growth story sits alongside a more uncomfortable one. Hong Kong has been sharpening its own pitch to fund managers, most notably through proposed tax exemptions on carried interest that would apply to a wide range of alternative asset managers. Industry groups, including the Alternative Investment Management Association, have told MAS directly that some member firms are already in active conversations about relocating staff and operations within months, not years.

In response, MAS is reported to be reviewing a reduction in the concessionary tax rate available to qualifying fund managers, potentially bringing it down from the current relief level toward a rate closer to 10 per cent rather than the standard corporate rate of 17 per cent, with the savings intended to flow through to portfolio managers themselves. MAS managing director Chia Der Jiun has said the authority is in active discussion with industry players on how Singapore’s competitiveness can be improved, with a review expected to conclude soon.

Tax policy is not the only lever being pulled. MAS has also confirmed an expansion of its Equity Market Development Programme, lifting its size from S$5 billion to S$6.5 billion after a top up to the Financial Sector Development Fund announced at Budget 2026. The programme channels capital into fund strategies that invest substantially in Singapore listed equities, run by managers with a demonstrated track record and a commitment to growing their research and investment capabilities locally. Alongside this, an ETF Industry Taskforce co led by MAS and the Singapore Exchange is working to deepen the local exchange traded fund market, while a separate Private Market Programme continues to anchor marquee names in private equity, private credit and infrastructure in Singapore.

What this means for fund managers and investors

For fund managers already based in Singapore, the immediate read is reassuring. Inflows are growing, mandates are expanding, and the VCC framework has matured into a credible, widely used structure rather than an experiment. For managers weighing where to base a new fund or expand an existing one, the calculus is becoming more competitive, not less. Singapore is no longer winning simply by being stable and well regulated. It now has to actively match what rivals such as Hong Kong are prepared to offer on tax and cost.

What is unlikely to change, regardless of how the tax review lands, is the underlying appeal of Singapore’s regulatory credibility, its depth of legal, audit and fund administration talent, and its position as a base from which to manage capital across the rest of Asia Pacific. The numbers released this year suggest that appeal is still working. Whether it keeps working at the same pace will depend on how quickly and how convincingly MAS follows through on the competitiveness measures now under review.

Figures referenced are drawn from the Monetary Authority of Singapore’s annual asset management industry survey and related public reporting. This article is for general information only and does not constitute investment, legal, or tax advice.