Expectations on Companies Tapping Anchor Fund @ 65 and Growth IPO Funds

Mr Chua Kheng Wee Louis asked the Deputy Prime Minister and Minister for Trade and Industry (a) whether the Government has a role in determining the prerequisites for companies tapping on the Anchor Fund @ 65 and Growth IPO Funds; (b) if so, whether an eventual local public listing is a prerequisite for companies tapping on these funds; (c) what have been the total dollar investments tapped from such funds to date; (d) whether there are any target fund life for such funds; and (e) whether there are any exit timeline for the current portfolio of companies.

In 2022, the Government established the Anchor Fund and Growth Initial Public Offering (IPO) Fund to support promising high-growth companies and encourage their listing on the Singapore Exchange (SGX). To date, both funds have invested more than $500 million of capital in a total of nine companies.

The respective fund managers make their investment decisions on a commercial basis, in line with their fund mandates. The fund managers look for companies with the potential for investment returns and which are also seriously considering a listing. The fund managers will advise these companies on the listing requirements of SGX, facilitate engagements with investment banks and advisers, and plan a viable timeline for listing based on the company’s growth strategy and prevailing market conditions. But the call on when and where to list remains a commercial decision for each company to make.

The last two years have been challenging for equity markets, not just in Singapore, but globally, due to inflationary pressures and the high interest rate environment. Globally, the total number of initial public offerings declined to 1,298 in 2023 from the 2021 peak of 2,436 IPOs. Likewise, IPO proceeds declined in 2023 to US$123.2 billion raised, from the 2021 peak of US$459.9 billion1. More IPOs are also gravitating towards larger equity markets.

The two funds may encourage more promising companies to list on SGX. But they are not a silver bullet. The Monetary Authority of Singapore has recently set up a Review Group to consider other measures to strengthen the Singapore equities market.