SINGAPORE - Singapore-based private equity and venture capital firms managed $32 billion last year - up 20 per cent from that in 2011.
About 40 per cent of the funds managed here are invested in South-east Asia, according to a survey by the Singapore Venture Capital and Private Equity Association (SVCA).
Mr Chua Kee Lock, chief executive of venture capital firm Vertex Venture Holdings, said on Monday that these funds use Singapore only as the place of incorporation.
"The fund managers do this because our rules, law and tax structure are clear and our policymakers take a longer-term perspective when they review changes," he added.
"To put it simply, funds do not expect big swings or sudden changes, which is important since the typical fund life is 10 years."
The funds' South-east Asian investments are probably aimed at buyouts and hedge funds, "where they are looking at anything with decent growth of 20 per cent to 30 per cent and good profit", noted Mr Chua.
SVCA president Jeffrey Chi told The Straits Times that the growing middle-class segment and the markets that they create for goods and services are attracting fund managers to South-east Asia.
Fund managers have been investing in China and India over the past five years but problems of liquidity and exit difficulties have prompted them to turn to South-east Asia instead, he said.
Mr Than Su Ee, head of OCBC's mezzanine capital unit, said: "Traditionally in Asia, China has been the epicentre of private equity investment activities."
But restrictions on capital raising and other regulations have begun to turn investors' attention to South-east Asia, he noted.
Mr Rodney Muse, managing partner of private equity firm Navis Capital Partners, said India has promise, but has not delivered.
"Our investments in South- east Asia have delivered much more consistent returns and distributed more cash to our shareholders.
"So India has become less attractive," he added.
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