On Oct 7, Mukesh Ambani, Reliance Industries chairman and Asia’s second-wealthiest man, was reportedly in the process of setting up a family office in Singapore.
Ambani is far from the only ultra-high-net-worth individual (UHNWI) to have funnelled capital into Singapore in the past couple of years. Other big names have included hedge fund billionaire Ray Dalio, Google co-founder Sergey Bri and James Dyson, UK founder of household appliance firm Dyson.
The Monetary Authority of Singapore (MAS) estimates there were about 400 single family offices in the country at the end of 2020, with the number almost doubling to 700 by the end of 2021. This is a clear sign of how Singapore, with its friendly tax regime and relative security, has grown as an attractive base for family offices.
Although the sudden increase of global wealth in the city-state has seen some pushback due to concerns over pricing inflation to housing, cars and other consumer goods, Leading Edge founder Wayne Siew believes that a high concentration of UHNWIs is primarily a boon for Singapore — and Singaporeans.
Leading Edge, a full-spectrum fund administration service provider for fund managers and family offices, is collaborating with Enterprise Singapore (EnterpriseSG) to launch IMPACT+, the inaugural family office and investor conference, and partner event for the Singapore Week of Innovation and TeCHnology (SWITCH).
“IMPACT+ is a platform for people who are looking for private capital to connect with people who have private capital to provide. Together, they will drive positive effects not only for their own needs, but also in terms of the broader community,” says Siew.
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EnterpriseSG’s Cindy Ngiam, director, SWITCH programme office, says: “Over the past six years, we have continued to expand our network of ecosystem partners and deepen support for start-ups across talent, funding and infrastructure.”
SWITCH 2022 will spotlight emerging opportunities for partnerships and collaboration in innovation, in and beyond Asia. The conference will be held from Oct 25 to 28 and is expected to gather more than 300 speakers and 250 exhibitors from the Global-Asia innovation ecosystem, attracting and engaging start-ups, entrepreneurs, investors, MNCs and public-sector leaders from around the world.
Ngiam explains that the expansion of SWITCH to include a targeted event for family offices and venture capital firms will help focus attention on “smart capital” and channel new financing into innovation and start-ups. IMPACT+ will be held concurrently on Oct 27 and 28 with dedicated sessions to “unearth emerging tech trends and explore win-win partnerships”, she says.
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Over the course of the closed door, invite-only meeting, there will be dedicated breakout sessions and roundtable discussions with key policymakers and thought leaders in critical interest areas such as sustainability, crypto, Web 3.0 and future energy, as well as the launch of a Tech Index measuring attractiveness of markers of greenfield foreign direct investment by Foresight Economics.
Siew believes the outcomes of the discussions at IMPACT+ will “radiate” to the rest of the marketplace, directly and indirectly. “It’s very important for the rest of the start-up investment community to be aware that this platform exists today,” he says.
“When capital is invested in an impactful way, it can have an outsized benefit for communities and investors alike. We are looking forward to open exchanges with our venture capital community and build new synergies to strengthen the larger innovation and start-up ecosystem in Singapore,” adds Ngiam.
Family office functions
Siew started his company in December 2020 after nearly two decades of watching the wealth management space, when he decided that family offices and fund managers needed better servicing.
The timing for Leading Edge could not have been any better with the influx of family offices and private capital, which Siew believes is partly due to Singapore’s booming startup ecosystem. He explains that the presence of innovative start-ups tends to attract venture capital, which in Asia is often backed by family offices.
According to him, family offices globally have three functions: the first is its existing business, with which the family is still involved, while the second and third are private equity and venture capital respectively.
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The venture capital function attempts to track outcomes such as identifying new and investable ideas in order to drive capital preservation and acceleration. In certain cases, family offices could be positive enough on a start-up to make it a part of their portfolio altogether, adds Siew.
Meanwhile, the private equity aspect functions more independently of the family business and is run similarly to a “commercial institution” of its own. Siew says that private equity plays an “exceedingly” important role in helping family offices manage their funds and continue their work.
IMPACT+, he believes, is unique in that it has managed to find “relevance” to all three facets of a family office by connecting them with global innovators. “Our event will give start-ups the opportunity to accelerate and to short-cut, not only the fundraising process, but also the market validation process, by looking at the smartest, best-capitalised players in the market who have themselves specific interests to build successful and meaningful impact on the marketplace and the rest of the community because they will also benefit directly from [their investments],” says Siew.
He sees IMPACT+ as being made up of several “concentric circles”, starting with the “nucleus” of top global start-ups and followed by several “layers” of discussions for knowledge sharing and networking, through which the attendees can pick out opportunities on the horizon.
And in spite of macroeconomic headwinds and increased investor caution, of which Ngiam says EnterpriseSG is “cognisant”, she believes that there remain “abundant opportunities”, with robust momentum in private equity and venture capital in the region.
Last year, private equity and venture capital investments grew by 40% in Asean to reach US$30 billion ($43.2 billion), with Singapore home to over 400 private equity and venture capital managers and an estimated 500 family offices. “This is a source of capital and funding that we should engage,” says Ngiam.
Advantage Singapore
Siew believes that Singapore commands an “advantageous position” with the influx of UHNWIs. The latter are not only parking their significant capital in the country, but are using the country as a base to build and develop new businesses and prove concepts of new ideas, which could grow to become globally relevant.
“It is about building your headquarters in Singapore so that you can reliably tackle the rest of the ambiguities in all the other markets,” says Siew. “That is something I think Singapore needs to be very proud of.”
The way he sees it, there are several reasons why Singapore has become capital-attractive, including strong rule of law, business-friendly practices and the public-private partnership which ensure Singapore remains a safe and stable location for tangible and intangible assets alike.
Ngiam adds that with Singapore building a strong reputation as a key venture and private capital market in the region, and as a destination to attract funds from overseas asset owners, it will benefit from access to new technology, business knowhow and networks — setting Singapore “in good stead” to catalyse even more innovation projects.
She explains that Asia’s innovation and start-up ecosystem has grown from “strength to strength”, with more innovative start-ups emerging to disrupt industries and capture novel opportunities. In order to sustain this growth momentum, Singapore’s ecosystem has had to continuously evolve in tandem — with access to funding a key driver.
That said, Ngiam believes that attracting capital is only the “first step” in the process.
“Our ability to succeed as a Global-Asia node of technology, innovation and enterprise is underpinned by a holistic approach to developing our ecosystem; by cultivating a pro-business environment, investing in world-class research institutes and infrastructure, building a pipeline of high-quality talent, and establishing strong linkages with overseas partners and innovation hubs,” she explains, adding that this will take the collective effort of both private and public ecosystem players.
With Singapore still primarily a manufacturing economy, Ngiam says that innovation will serve as a “key plank” in helping businesses carve out a competitive advantage; and that it is critical for the manufacturing sector to embark on innovation projects and stay ahead of the curve.
In tandem with this push towards supporting innovation, she notes that the Singapore government has deepened capabilities and built infrastructure to help local companies move up the value chain and support manufacturers on their innovation journeys.
For example, A*STAR launched its Innovation Factory @ SIMTech in 2020 to help companies transform their innovative ideas into commercially viable products, with the support of EnterpriseSG.
Through the Innovation Factory, local vision solutions manufacturer JM VisTec has been able to develop a highly flexible and configurable high-speed 3D fringe projection laser scanner, for use in inspection and other machine vision applications. “This has helped JM VisTec to provide more value-added services and meet increased demand for automated workflows,” says Ngiam.
Meanwhile, Singapore has also been intentionally building up capabilities outside of manufacturing. “Over the past three decades, we have invested significantly to deepen our expertise in research and development and build our innovation ecosystem. This keeps us nimble and ever ready to respond to emerging trends and challenges alike,” she adds.
She believes that the confluence of digitalisation, rapid urbanisation, and the increased focus on sustainability has presented a “plethora” of new business opportunities that are ripe for picking. “Our start-ups, SMEs and larger companies must keep up with these trends — and develop new solutions in sectors such as healthcare or in the circular economy — to meet market demand and create new value,” Ngiam says.
For Siew, this is exactly why the wider ecosystem has a “vested interest” in IMPACT+ and the engagement of family offices and fund managers in Singapore.
“Over time, the platform will seek to work with a broader community of entrepreneurs, start-ups, small-and-medium enterprises, and even larger corporations both in Singapore and globally,” he says. “This will create opportunities for Singaporeans to participate in the global arena.”
The Edge Singapore is the official media partner of IMPACT +
For more information about IMPACT +, please visit https://www.impactplus.asia/
For more information about SWITCH and to register, please go to https://www.switchsg.org/impactplus/
