SINGAPORE: State investment firm Temasek Holdings and the Government will establish a new co-investment fund, as part of a slew of new initiatives aimed at attracting fast-growing companies to list on the Singapore bourse and enhance the country’s role as a financing hub.
Making the announcement on Friday (Sep 17), Trade and Industry Minister Gan Kim Yong said the new “Anchor Fund @ 65” will invest in late-stage private funding and initial public offerings (IPO) of high-growth companies to help “anchor” their listings in Singapore.
The fund will be managed on a commercial basis by Temasek’s investment platform 65 Equity Partners and start with an initial capital tranche of S$1.5 billion.
The EDBI, the Economic Development Board’s corporate investment arm, also intends to set up a “Growth IPO Fund”. Starting with a fund size of up to S$500 million, this will be targeted at future market leaders and technology innovators that are two to five years away from a public listing.
Mr Gan said: “EDBI will invest in growth-stage companies at earlier stages of development and partner with them to grow their operations and anchor key capabilities in Singapore, with a view towards an SGX (Singapore Exchange) listing.
“This is in line with EDBI’s strategic objective to anchor high-growth companies and investors in Singapore to grow our future economic pillars.”
Enhancements to the Grant for Equity Market Singapore (GEMS) scheme were also announced. The scheme was first introduced in February 2019 to help defray listing costs and fund equity research.
Companies with larger market capitalisation will now be able to tap on the GEMS listing grant to co-fund 70 per cent of their expenses, up to S$2 million. Smaller firms can get 70 per cent co-funding up to a cap of S$1 million.
This replaces the existing categories under the GEMS listing grant that capped co-funding by the Monetary Authority of Singapore (MAS) at a range of S$200,000 to S$1 million.
The higher cap will better support listings of “unicorn” companies – defined as unlisted start-ups valued in excess of US$1 billion – in Singapore, said Mr Gan. The grant will also be expanded to support listings by special purpose acquisition companies (SPACs).
Meanwhile, the MAS will expand the GEMS research talent development grant in two ways. The funding quantum for experienced professionals will be raised from S$5,000 to S$6,000 per month, while the funding duration for experienced professionals who are Singapore citizen will increase from one to two years.
MAS will also expand the scheme’s parameters to include research providers that serve accredited and institutional investors, and broaden the scope of eligible research coverage.
Lastly, bourse operator SGX will develop “bespoke” capital market solutions for high-growth companies under a strategic partnership model.
These will include private fundraising to enhancing liquidity and profile-building.
Mr Gan, in a speech delivered at the SGX, said Singapore must ensure that start-ups and companies have continued access to a range of financing options as they grow and mature.
The country has a strong ecosystem for early-stage investments and is a leading debt capital market in Asia, but there have been calls for Singapore to make its public equity market more conducive for innovative growth companies, the minister said.
The SGX has been strengthening its appeal to these companies in recent years by, for instance, replacing mandatory quarterly reporting with a new risk-based reporting regime last year, he added.
It also announced earlier this month new rules that enable the listing of SPACS, making it the first Asian bourse to do so after the frenzy seen in such investment vehicles in the United States since 2020.
Mr Gan said: “In the coming years, many Singaporean and Asian companies in high-growth, high-tech sectors will come of age, and seek to list on public markets. We should strive to anchor these companies in Singapore.
“To do this, we will make a concerted push to establish Singapore as the listing destination of choice for local and global market leaders, especially from high-growth and high-tech sectors.”
He noted, however, that the four new initiatives are "no magic bullet”.
“But we believe that they will blow new wind into the sails of our public equity market and make SGX not just a viable but a compelling option for innovative growth companies seeking a public listing,” Mr Gan said.
In a separate press release, SGX’s chief executive officer Loh Boon Chye described the latest initiatives as “a first of its kind within the region” that will “further (set) Singapore apart as a capital markets hub”.
“There are many Asian and home-grown companies which are at the cusp of global success. Anchored in Asia’s only AAA-rated economy, SGX provides an international platform, network and ecosystem for these companies to access growth capital from private to public markets and across asset classes,” he said.