Singapore: Boosting Equity Financing for High-Growth Enterprises

Singapore announced a package of initiatives to support high-growth enterprises to raise capital in Singapore’s public equity market and broaden Singapore’s proposition as a financing hub.

The package comprises four initiatives:

• Establishment of a co-investment fund named Anchor Fund @ 65 that will help promising high-growth enterprises raise capital through public listings in Singapore
• Establishment of the Growth IPO Fund that will help late-stage private enterprises at about two or more funding rounds away from a public listing to grow and prepare for an eventual public listing in Singapore
• Enhancements to the Grant for Equity Market Singapore (GEMS) scheme to support enterprises seeking to list in Singapore, and to help develop Singapore’s equity research ecosystem; and
• Singapore Exchange’s Strategic Partnership Model, which will develop bespoke solutions ranging from private market fundraising to liquidity building and global investor outreach for high-growth companies

Anchor Fund @ 65

The Singapore Government and Temasek will establish a new co-investment fund, named Anchor Fund @ 65, starting with S$1.5 billion in the first tranche. This fund will support promising high-growth enterprises and market leaders in their public fundraising in Singapore’s public equity market, whether through primary, secondary, or dual listings, as well as provide pre-IPO financing to catalyze the growth of target enterprises and support them in their journey towards an eventual public listing. The fund will be managed on a commercial basis by 65 Equity Partners, a wholly owned investment platform of Temasek. In addition to anchoring the investee enterprises’ public listings, the fund aims to drive good corporate governance and facilitate shareholder value creation.

Growth IPO Fund

EDBI, the dedicated investment arm of the Singapore Economic Development Board (EDB), invests in high-growth, globally competitive and innovative enterprises, typically at Series B or later, with the aim of anchoring key activities and competencies in Singapore to catalyze the growth of new economy sectors and build the foundations for our future economic pillars. EDBI intends to establish a new Growth IPO Fund to invest in later-stage enterprises, typically at two or more funding rounds away from a public listing. Through this fund, EDBI will partner with companies to grow their operations in Singapore, and work towards an eventual public listing in Singapore. Starting with a fund size of up to S$500 million, this fund will bridge the gap between EDBI’s typical growth-stage investments and the investments of the Anchor Fund @ 65, strengthening end-to-end access to financing for companies in the Singapore ecosystem.

Grant for Equity Market Singapore (GEMS)

MAS’ GEMS scheme, first introduced in February 2019, aims to strengthen Singapore’s equity capital market through a Listing grant to help issuers defray some of their listing costs, a Research Talent Development grant to groom equity research talent through the co-funding of hiring expenses and enrich research coverage of Singapore-listed companies; as well as a Research Initiatives grant to support crowdsourced initiatives to propel the development of Singapore’s equity research ecosystem. MAS will enhance the GEMS scheme to expand the scope of support for the Listing grant and Research Talent Development grant:

• Listing grant — MAS will increase the co-funding of listing expenses for all companies. Companies with larger market capitalisation1 will qualify for 70% co-funding of up to S$2 million, while smaller companies will qualify for 70% co-funding of up to S$1 million
• Research Talent Development grant — MAS will increase the funding for experienced professionals to S$6,000 per month, and the funding duration for experienced professionals who are Singapore citizen to two years MAS will also expand the scheme’s parameters to include research providers that serve accredited and institutional investors, and broaden the scope of research coverage that allow applicants to qualify for the grant

The enhancements to the GEMS scheme take immediate effect.

Strategic Partnership Model

Beyond providing a listing platform for IPOs, SGX will package bespoke capital market solutions to support the unique needs of high-growth companies. These multi-year solutions range from private fundraising, liquidity and profile building, to augmenting future growth drivers of companies:

• Prior to a listing, potential issuers can tap on SGX’s partnerships and network to access private market capital and expand its base of strategic investors
• With an enhanced liquidity provider program comprising over 40 market makers and active traders, strategic partner companies are supported with continuous quotation. Up to 24 months of liquidity support will also be available to drive price formation for potential inclusion into global indices
• Funded profiling initiatives such as joint marketing, targeted corporate events and global investor outreach will be customized for each strategic partner company, alongside capacity building in sustainability and industry-specific decarbonization advisory services

Source: MAS

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