Trends in Singapore M&A in Finance and Asset Management

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    Edwin Ng, CFA, CA

    The global M&A activity in banking has seen a sharp decline since the peak in 2007 (pre-lehman crisis) and saw it flat-line since 2014, value averaging about $100.

    Singapore, in general for all M&A activities and industries, saw an increase from 2018 to 2019 notwithstanding global geopolitical uncertainties. Overall, Singapore’s M&A activity stood at $35 billion in 2019, up 125% from 2018. Financial services and investment management takes up a large chunk of the outbound M&A pie. Singapore is also gaining traction in building a start-up ecosystem. It has initiated various schemes to encourage FinTech firms to obtain funding and to build their base in Singapore.
    Separately, the Monetary Authority of Singapore (MAS) created a new category of licence for venture capital (VC) fund managers which has lower threshold for qualification. Singapore has been encouraging the expansion of asset management across the region. Most notably, the recent UOB acquisition of VAM (Vietnam) underscores the local asset management firms’ intention of casting their net wider regionally.

    In the funds space, the Variable Capital Companies Act (VCC), came into force in Jan 2020. Fuelled by the MAS grant scheme, which subsidises the costs of establishment or re-domiciliation of funds, fund managers in Singapore are strongly incentivised to co-locate their funds in Singapore. The increase in activity in the funds space may well lead to an update in M&A activity in Singapore.

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