AUM growth decelerated sharply from 12% in 2024, with MAS rolling out S$5 billion stimulus and tighter liquidity rules.

Growth Deceleration in Context

Singapore's fund management segment expanded by 5.1% in 2025, a marked deceleration from the prior year's double-digit growth, as global market weakness and volatility dampened investor appetite. According to the Monetary Authority of Singapore's latest data, total assets under management rose 12% to S$6.07 trillion in 2024, with net inflows surging 50% year-on-year to S$290 billion. The sharp slowdown to 5.1% segment growth in 2025 reflects weaker global market conditions that have compressed both fund flows and asset valuations across the industry.

The deceleration is particularly notable given the momentum Singapore's asset management sector had built in 2024, when AUM growth comfortably exceeded the compound annual growth rate of the preceding five years. Industry participants point to a combination of reduced risk appetite among institutional allocators and mark-to-market losses on cross-border portfolios as primary contributors to the slowdown.

Growth Rate (%) (%)Source: Orionmano Industries

Global Market Conditions and Volatility

The 2025 growth slowdown is directly linked to documented episodes of market turbulence that tested the resilience of Singapore's financial system. The International Monetary Fund's 2025 Article IV Consultation for Singapore highlighted that investment funds experienced periods of "high market volatility in August 2024 and April 2025." While the IMF noted that funds "have been able to meet investor redemption requests in an orderly manner" during these stress events, it also identified significant vulnerabilities.

The IMF's stress scenarios specifically warn that Singapore's financial sector could come under pressure from "a further tightening of global financial conditions, leading to higher FX borrowing costs, a reduction of cross-border capital flows, and a worsening in credit quality." The report further notes that approximately 15% of banks' assets and 19% of liabilities are linked to the non-bank financial intermediation (NBFI) sector, creating transmission channels between fund management distress and the broader financial system. These downside risks—weaker global growth, cross-border capital flow reductions, and potential liquidity dislocations—were already materialising through 2025, directly constraining AUM expansion.

Regulatory Response and Ecosystem Strengthening

In response to the challenging environment, the Monetary Authority of Singapore and the Financial Sector Development Fund launched a S$5 billion Equity Market Development Programme (EQDP) in 2025. Under this programme, MAS will invest with selected fund managers that demonstrate capabilities to implement investment mandates with a strong focus on Singapore stocks. These strategies must be actively managed, invest across a range of companies rather than just index component stocks, and aim to draw in investments from other investors over time.

The authorities also introduced an enhanced 5% concessionary tax rate on qualifying income for new fund manager listings in Singapore, requiring eligible fund managers to distribute a portion of their profits as dividends to qualify. Additional measures include the expansion of the Research Development Grant Scheme under MAS' Grant for Equity Market Singapore (GEMS), designed to build a ready investor base, sharpen focus on mid- and small-cap enterprises, and broaden research dissemination via new media channels.

On the regulatory front, MAS Managing Director Mr. Chia Der Jiun announced in April 2025 a review of the liquidity risk management framework applicable to licensed fund management companies. This review, disclosed during the annual Investment Management Association of Singapore Investment Conference, aims to enhance the resilience of Singapore's fund management industry in both normal and stressed market conditions. The review aligns with calls from the Financial Stability Board and the International Organization of Securities Commissions to reinforce consistency between a fund's investment strategy and liquidity with its redemption terms.

Structural Drivers and Capital Inflows

Despite cyclical headwinds, Singapore continues to benefit from powerful structural wealth inflows that provide a floor under fund management growth. Family offices in the city-state grew from approximately 400 in 2020 to more than 2,000 in 2024, according to data cited by the Department of Statistics. This trajectory underscores Singapore's rapid emergence as the preferred wealth management hub in Asia.

The Boston Consulting Group's Global Wealth Report 2025 ranked Singapore among the fastest-growing financial centres for cross-border wealth inflows in 2024, with capital arriving from China, India, Southeast Asia, and increasingly the Middle East. These inflows are reshaping the composition of Singapore's capital pool, with institutional and family office capital seeking long-term domestic exposure through dividend-paying stocks, digitalisation themes, and sustainability-linked investments.

Against this backdrop, Singapore's fund management growth is expected to remain subdued in 2026 given persistent global headwinds and ongoing regulatory tightening. However, the combination of structural wealth migration, the S$5 billion EQDP stimulus, and continued ecosystem enhancements suggests the deceleration may represent a consolidation phase rather than a structural reversal. The IMF's assessment that Singapore's banking system remains well-capitalised—with a capital adequacy ratio of 18.9% in 2025Q1 and strong liquidity positions—reinforces the view that the broader financial infrastructure supporting fund management activity remains robust.