Parliamentary Replies
Published Date: 10 May 2023

Oral reply to Parliamentary Question on wealth inflows and family offices

Date: For Parliament Sitting on 10 May 2023

Name and Constituency of Member of Parliament

Mr Chua Kheng Wee Louis, Sengkang GRC


To ask the Prime Minister in each of the past five years to date, what is the value of wealth inflows into Singapore (i) on aggregate and (ii) as broken down by the top 10 source countries.

Answer by Mr Alvin Tan, Minister of State, Ministry of Trade and Industry and Ministry of Culture, Community and Youth, and Board member of MAS, on behalf of Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:

1. Mr Speaker, I will take this question by Mr Louis Chua and the two questions filed by Mr Leong Mun Wai in yesterday’s Order PaperPQs by Mr Leong Mun Wai for Parliament Sitting on 09 May 2023: • Mr Leong Mun Wai: To ask the Prime Minister for each year since 2020 (a) what is the total inflow of foreign funds into Singapore through family offices, broken down by each source country; and (b) whether the Government will provide an assessment on the impact of the inflow of such foreign funds on (i) Singapore’s Official Foreign Reserves position (ii) the private property market and (iii) inflation. • Mr Leong Mun Wai: To ask the Prime Minister with regard to single family offices applying for tax incentive schemes since April 2022 and are required to allocate at least 10% or S$10 million of their assets, whichever is lower, to local investments, what is the total assets that have been invested locally into (i) equities listed on Singapore exchanges (ii) private equity investments in unlisted Singapore-incorporated companies and (iii) qualifying debt securities. together as they pertain to wealth inflows and family offices. 

2. Singapore is a trusted, vibrant, and well-regulated international financial centre in Asia, one of the fastest growing regions in the world. Naturally, this has attracted a wide range of investors, including global and regional institutional investors as well as individual investors. Family offices are one particular category of individual investment. 

3. MAS does not have comprehensive data on fund inflows into Singapore through family offices. Such detailed data is not necessary for MAS to carry out its functions of ensuring macroeconomic and financial stability. But let me share what we have.
4. Mr Louis Chua asked about wealth flows while Mr Leong Mun Wai asked about foreign funds inflow through family offices. I take their interest to be in investments made by high-end individual investors. The investor type closest to high-end individual investors in MAS’ annual Asset Management Survey is the category called “non-retail individual clients”. This category includes family offices, clients of external asset managers, private trusts, and high net worth individuals. Based on the survey, the Assets Under Management (AUM) of foreign non-retail individual clients managed by financial institutions in Singapore increased by about S$470 billion from 2017 to 2021. This makes up about 20% of the increase in total AUM by Singapore’s asset management industry from 2017 to 2021. 

5. Also, the growth of assets from these high-end individual clients has been broadly similar to that for overall AUM. In other words, there has been a much broader pick-up of funds flowing into Singapore’s wealth management industry, not peculiar to these high-end individual clients. 

6. There is no breakdown for family offices in particular in MAS’ annual survey. However, SFOs that apply for and are granted tax incentives by MAS managed about S$90 billion of assets as at 2021. This is less than 2% of the S$5.4 trillion assets managed in Singapore as at 2021.  

7. In short, the bulk of the increase in AUM in Singapore is attributable to institutional investors. Non-retail individual clients account for a small proportion, and family offices even less.

8. Mr Louis Chua and Mr Leong Mun Wai asked for a breakdown by source countries of wealth inflows, and for Mr Leong Mun Wai, specifically for family offices. Based on the Asset Management Survey, non-retail individual clients come from a wide range of places. 

9. The most granular breakdown of foreign sourced funds is available by regions, rather than by specific countries. This is no different from surveys published by financial sector authorities or industry associations in major wealth management centres like London, Hong Kong and Switzerland. What we are providing on the regional breakdown for non-retail individual clients in fact goes beyond what these other jurisdictions publish as they do not put out data on specific categories of investors like individual investors. 

10. The top-sourced foreign region for the increase in Singapore’s AUM for high-end individual investors from 2017 to 2021 was the Asia-Pacific, as is to be expected. It accounted for slightly over half of AUM sourced from high-end individual investors. Asia-Pacific was followed by Europe and the Americas. 

11. Mr Leong asked how much SFOs that have applied for tax incentives since April 2022 have invested in local investments. We do not yet have the data as these SFOs have two years from their point of application to meet the local investments requirement that MAS just introduced in April 2022. As we are within the first two-year implementation period, data on the volume of assets is not currently available.

12. Members of the House should note, however, that while assets are managed in Singapore by entities based here, most of these assets are invested outside Singapore. This is understandable as the investment universe is much larger outside Singapore and investors use Singapore to access investment opportunities in the region and beyond. But as these assets are managed from Singapore, they help to create jobs and valued-added in our financial industry. There are also positive spillovers to other sectors as these investors often appoint tax and legal professionals for wealth planning and operational matters.

13. Mr Leong also asked about the impact of the inflow of foreign funds through family offices on Singapore’s Official Foreign Reserves, the private property market, and inflation. To set the context, the bulk of the gross inflows into Singapore comprise flows by financial institutions and other non-financial corporates, not high-end individual investors, and even less so family offices which are only one category within the latter.   

14. To reiterate, most of the funds managed here are invested in assets outside Singapore. Hence, they typically remain in foreign currencies and have little or no effect on the Singapore Dollar exchange rate or Official Foreign Reserves. If some of these inflows do get converted into Singapore Dollars, they would, just like all net capital flows into Singapore dollars, generate some appreciation pressure on the exchange rate. MAS addresses any such pressures, regardless of the source of funds, as part of its regular market operations to achieve its monetary policy objectives. We have not seen unusual surges of capital into the Singapore dollar that have required a pronounced response on MAS’ part, and certainly not from family offices which, to reiterate, would not form a significant portion of the total flow of funds for management out of Singapore. 

15. As for inflation, it has little to do with foreign fund inflows into Singapore, let alone the portion due to family offices. The step-up in core inflation since late-2021 was primarily due to sharp increases in global energy, imported food prices, and stronger domestic wage growth. These cost increases fed through to higher electricity & gas, food and essential services prices, accounting for nearly 75% of MAS Core Inflation in 2022.   

16. Some foreign funds do flow into the private property market. However, purchases by foreigners have been relatively low, at about 4% of all private residential property purchases on average over the last 3 years. More specific to Mr Leong’s question, family offices themselves have had virtually no impact on our private housing market as there was no residential property transaction attributable to family offices over the last six yearsWritten Reply by MND to Parliamentary Question (9 Jan 2023) on investment by family offices in property pre- and post- COVID-19 pandemic