Working with Family Offices to Deepen Investments in Local Companies

1 Mr Desmond Choo asked the Prime Minister whether and, if so, how has the Ministry been working with family offices in Singapore to deepen investments in local companies.

The Minister of State for Trade and Industry (Mr Alvin Tan) (on behalf of the Prime Minister): Sir, our Government agencies are working to encourage family offices to invest in local companies in a number of ways.

First, single family offices (SFOs) applying for tax incentive schemes have been required since April this year to allocate at least 10% or S$10million of their assets, whichever is lower, to local investments. Local investments may include: one, equities listed on Singapore exchanges; two, private equity investments in unlisted Singapore-incorporated companies; or three, qualifying debt securities.

Second, MAS and Enterprise Singapore have set up a number of platforms to connect local companies to potential investors, including family offices. These include "Deal Fridays", FinTech Investor sessions, and the Singapore Week of Innovation and Technology (SWITCH), which we will be organising from 25-28 October, this month. We are also encouraging match-ups during the annual Singapore FinTech Festival, which will also be organised very shortly, from 2-4 November.

Third, MAS and EDB have supported the Wealth Management Institute’s Global-Asia Family Office Circle, which aims to encourage family offices here to make co-investments in companies as well as develop strategies in areas such as philanthropy and sustainable investments.

At the same time, we must recognise that family offices come to Singapore to access investment and philanthropic opportunities in the broader Asian region. This adds to Singapore’s status as a dynamic as well as purposeful financial centre, supporting growth and opportunity in our neighbouring countries.

Mr Deputy Speaker: Mr Desmond Choo.

Mr Desmond Choo (Tampines): Deputy Speaker, I would like to thank the Minister of State for his reply. I have a couple of clarifications. The first is, how have and will local companies and the local workforce benefit from family offices? Second, where do these family offices generally come from? That is, which country or which industry were they operating in before they set up in Singapore?

Mr Alvin Tan: Mr Deputy Speaker, I thank the Member for his supplementary questions. The SFOs generate employment in Singapore in a couple of ways. The first is by directly employing advisers and investment professionals; and also, to generate indirect employment when they work, for example, with external finance, tax and legal professionals, and also fund administrators, for example, custodians, on investment management, wealth planning and also operational matters. So, a wide aspect in both direct as well as indirect employment.

SFOs also expand the pool of patient capital for Singapore-based startups and business ventures, as well as Singapore-based funds that invest in such companies. Investee companies may also benefit from the strategic guidance offered by the principals of these family offices, many of whom themselves are owners of successful businesses.

Some families also use their SFOs or related entities to manage their investments and contributions towards social and philanthropic activities or causes in Singapore.

With regard to the second supplementary question on where the SFOs originate from, the SFO community in Singapore is diverse, it is international. They come from a variety of regions, including Europe, the US as well as Asia. And families who are keen to set up a satellite presence here in Singapore, do so because of our favourable business environment, connectivity to the region which allow for them to use Singapore as a base to explore investment opportunities beyond Singapore to the region.

I will also just share a little bit about what we are doing to attract these family offices, as related to that supplementary question. The Member may know that in 2019, MAS and EDB jointly set up the Family Office Development Team or FODT to coordinate a whole-of-Government effort to ensure Singapore remains a really relevant and attractive location for family offices. This development team has three focus areas.

The first focus area is to enhance and widen the operating environment to broaden the suite of asset vehicles, such as variable capital companies (VCCs), that are available to these family offices.

Second is to develop the capabilities and to build essential skillsets among our service providers, both local as well as foreign, and our professionals. For example, MAS and the Institute of Banking and Finance launched these skill maps for family office advisers, including those at banks and tax or legal firms; and also, for entry level professionals employed in family offices; and also, then, management level executives who head and also run these offices. We also do training for advisers. For example, the Wealth Management Institute and the SMU Business Families Institute have launched a series of training programmes for family office advisers, professionals and principals that are then accredited against these skill maps.

So, if there are many individuals or professionals who are interested in entering this space or to deepen your capabilities, you can also take reference to these skill maps to better equip yourselves with the necessary skillsets to enter this industry. MAS has available co-funding schemes in place to offset the training fees for professionals attending these courses that have been accredited against these skill maps.

Finally, we are also facilitating this community building amongst family offices such as supporting the setting up of the Global Asia Family Office Circle to galvanise and to encourage like-minded family offices towards common areas of interest, such as ESG, philanthropy enterprise financing and to create opportunities for collaboration amongst many other co-investments.

The final point is that we have, as a posture, consistently welcomed a variety of financial and other capital investments into Singapore. We have welcomed individual companies that can contribute to Singapore's growth, create good jobs, regardless of where they are and regardless of their country of origin where they come from. So, we need to remain open, we need to remain connected to global investors to strengthen Singapore's value proposition to Asia and to be a key Asian node for high growth tech investment and tech companies to base here, to grow their patient capital, and then to grow and be a base for new and exciting industries, and ultimately, create good jobs for Singaporeans.