S'pore's managed assets grow 63%

S'pore's managed assets grow 63%

SINGAPORE (Reuters): Singapore's fund management industry saw
total assets under management grow 63 percent to S$246.2 billion
in 1999 on the year as firms flocked to set up shop in the city
state.

"We have seen a net inflow of funds into Singapore, like many
of our competitors. This because of the strong rebound in Asian
markets and more fund managers are setting up shop in Singapore,"
said Peter Hames, fund manager at Aberdeen Asset Management.

Hames said Singapore's standing as a fund management center
has grown thanks to central bank moves to free up its compulsory
pension scheme, the Central Provident Fund (CPF), the government
putting out funds for management and regulatory changes.

The number of investment professionals in the industry rose 20
percent in 1999, as the number of asset management firms rose to
191 against 169 the year earlier, a survey by central bank the
Monetary Authority of Singapore shows.

"This significant growth in assets can be attributed not only
to upward asset valuations but also to the inflow of new funds,"
Lim Hng Kiang, minister for health and second minister for
finance told investment managers at a meeting on Thursday.

Lim announced key survey findings.

He said the central bank plans a new licensing framework
requiring market players to hold a single license from MAS in
order to provide a range of financial services.

The licenses would lower barriers to entry for the securities
market and spur the growth of new products, Lim added.

The MAS survey showed that the number of large players
managing discretionary assets of more than S$5 billion has
increased to 11 from three a year ago.

Unit trust assets under management almost doubled to S$6.8
billion in 1999 from S$3.6 billion the previous year. Net
subscriptions of unit trusts for 1999 amounted to about S$1.5
billion, or growth of triple the previous year's.

"From a U.K. perspective, Singapore is the first choice for
fund managers over Hong Kong now -- for a long time, it had only
been Hong Kong," Hames said.

Aberdeen was among the first U.K. fund managers to set up shop
in Singapore in 1992 and now manages S$4 billion.

Despite the good growth in the Singapore fund management
industry, it is still much smaller than Hong Kong.

Data from Hong Kong's Securities and Futures Commission show
total assets under management by 150 companies in 1999 totaled
HK$3.5 trillion (US$449 billion), or about thrice those in
Singapore.

But fund managers said Singapore's growth will remain strong
with more deregulation ahead and the lure of government funds.

A key attraction for foreign funds has been the government's
plan to place out some S$35 billion of its own funds -- S$10
billion from MAS and S$25 billion from the Government of
Singapore Investment Corp. -- for external management.

Of the S$10 billion in MAS funds, the central bank has so far
earmarked S$4.1 billion for external fund mangers and expects the
full amount to be placed by the first quarter of 2001.

The GIC had placed out S$10.8 billion out of the S$25 billion
as of the end of 1999.

Ian Simmonds, senior vice president at Principal Capital
Management, said his company aimed for a greater presence in
Singapore and hoped eventually to manage some government funds.

Simmonds plans to relocate to Singapore by the month's end
from Sydney, where he is now based.

Another area of growth for private fund managers is an
alternative pension scheme, the Supplementary Retirement Scheme
proposed by the Singapore government.