In a significant development for fund managers, the Singapore MAS is the latest regulator to announce proposals for a new framework for retail private market investment funds. Hot on the heels of the FCA’s LTAF and EU’s ELTIF, the MAS is currently consulting on the development of a new Long-term Investment Fund (“LIF”) with the intention of broadening access to private market investments.
“Key to success will be investor confidence and that means robust frameworks for managers offering such products” – Jason Valoti, Simmons & Simmons, quoted in The Business Times – 14 April 2025.
Under the proposals, a LIF could take the form of either:
(i) a direct fund, investing directly into private market investments (“Direct Fund”); or
(ii) a fund-of funds structure that primarily invests into other private market funds (“LIFF”),
and could take the form of listed or unlisted structures.
To be eligible to manage a LIF, Managers will need to be licensed in Singapore as retail LFMCs.
The consultation is also seeking feedback on the type of assets the new vehicles would be permitted to invest in. In particular, the MAS is proposing (subject to feedback) to limit the scope of permitted investments to the following:
(a) private equity companies that meet certain criteria, such as minimum valuation, gross revenue and operating track record;
(b) private credit investments that are senior, backed by collateral, subject to protective covenants or issued to profitable companies of a certain size or gearing limit; or
(c) infrastructure assets that are income-generating brown-field assets.
For Direct Funds that are unlisted, MAS proposes that the manager should offer to redeem units at least once a year and that at least a proportion of the fund’s total assets should be offered annually, with redemption requests paid within 90 days from the dealing day the request is accepted. For LIFFs, at least 10% of the fund’s total assets should be offered annually.
Other questions being considered in the consultation include:
- what due diligence requirements should apply
- corporate governance requirements
- whether to include a requirement for managers to have a minimum skin in the game investment in the fund
- whether to include a requirement for a minimum percentage of a fund to be held by institutional or accredited investors
- appropriate concentration limits for private market investments
- valuation requirements, including frequency
- leverage limits
- disclosure requirements and risk warnings
- application of share disclosure requirements to LIFs and their managers
The consultation is open until 26 May 2025.
Please contact a member of our Singapore team for further information on the proposals.
