PIMCO 10th Anniversary Celebration, Congratulatory Remarks by Mr Shane Tregillis, Deputy Managing Director, Market Conduct Group, Monetary Authority of Singapore
Ladies and Gentlemen,
I am pleased to be here today to join in the celebration of PIMCO's 10th anniversary in Singapore.
Singapore's Development as an Asset Management Hub
2 When PIMCO established its Singapore office 10 years ago in 1996, this was PIMCO's first office established outside of the US. This was also at a time when Singapore's fund management industry was beginning to take off. Assets under management (AUM) in Singapore at that time were around S$100 billion. 10 years later much has changed. The industry in Singapore has grown significantly, not only in size, but as a centre of expertise in Asian investments.
3 As at end-2005, total assets managed by Singapore-based fund managers stood at S$720.4 billion. More than 80% of funds managed in Singapore are sourced from outside Singapore. About 33% come from the US and Europe, and 44% from the Asia-Pacific.
4 Increasingly, we are also seeing growth in funds sourced from new markets such as the Middle East, as well as South Asia. In terms of investments, well over 50% of the funds are invested in markets in the Asia-Pacific.
5 Today, many, if not all, of the top global fund managers are in Singapore. Many have set up dedicated Asian strategies and funds, and carry out the whole value chain of activities from portfolio management, research, trading, marketing and mid to back office settlement.
6 The profile of the asset management industry is also changing. We have witnessed the emergence of alternative investment managers in the industry in recent years. As of end last year, there were over 100 hedge fund managers managing well over US$10 billion in assets out of Singapore. In addition, we are seeing growth in the number of real estate investment managers and private equity fund-of- fund managers in Singapore. We expect this strong growth to continue for a number of reasons.
Strong Business and Investment Opportunities in Asia
7 The emergence of, and the strong economic performances of China and India, the recovery of Japan, and good economic performances in ASEAN have all resulted in significant wealth build up in Asia. Baring any unforeseen events, Asia will remain the focus of many investors and fund managers in the years ahead.
8 The size of official foreign reserves has grown significantly. According to the International Monetary Fund, Asia's official foreign reserves now account for 60% of global reserves.
9 In addition, Asia is estimated to have 2.4 million High Net Worth Individuals, with assets of over US$7.6 trillion, making up some 22.9% of global High Net Worth wealth. High Net Worth wealth is projected to grow by 6.7% annually to reach US$10.6 trillion by 2010 . Much of this wealth, according to industry estimates, is not managed professionally.
10 The growth in pension funds and restructuring of pension systems in Asia are also contributing to the further demand for professional asset management services.
11 This coupled with increasingly strong interest by international investors to diversify a greater proportion of their portfolios to Asian assets, all create strong business opportunities for fund managers based in Asia.
12 The continuing development of the domestic capital markets both in terms of the depth and liquidity of the listed securities and bond markets, and in the development and emergence of more alternative investment products in Asia will facilitate greater investment opportunities as well.
Singapore as a Base to Tap Asian Opportunities
13 Singapore, as evidenced by the growth of its asset management industry, is a good location to take advantage of these opportunities in Asia. Singapore's strong business, social and cultural ties with Asia, coupled with its strategic geographical location and efficient infrastructure, makes it an ideal base to access markets in North Asia, in South East Asia, and in India and the Middle East.
14 Indeed, PIMCO's decision to base your Southeast and South Asian client servicing operations out of Singapore testifies to the value of Singapore's role as an efficient centre to base these regional activities. In addition, we note that PIMCO has also started to execute its Asian trades in Singapore during the Asian timezone.
15 PIMCO has been part of the development of our asset management landscape over the past 10 years. We are confident that the Singapore asset management industry is very well positioned to take advantage of the many opportunities in the region and beyond in the coming years.
16 I am sure that there will be exciting times ahead for PIMCO as you take advantage of Singapore's position to capitalise on the business and investment opportunities in Asia over the next 10 years. I wish PIMCO every success.