Singapore Private Equity and Venture Capital Landscape Series – Limited Partnerships

Limited partnerships (LPs) are commonly used globally as fund vehicles for both private equity (PE) and venture capital (VC) funds. In Singapore, LPs were created as a business vehicle by the Limited Partnerships Act in 2008 (the Act), which came into effect on 4 May 2009 as part of Singapore’s efforts to become a fund management hub.

Those efforts have been supplemented by a myriad of other measures including (a) the creation of variable capital companies (VCCs) by the Variable Companies Act 2018, which came into force only on 14 January 2020; (b) the establishment of several classes of fund management licences including the venture capital fund management licence; and (c) a favourable tax environment that includes a one-tier system of taxation of income, no capital gain taxes and an extensive network of double taxation treaties, as well as several incentive schemes and grants. We will discuss these measures in more detail in other articles. Continue reading “Singapore Private Equity and Venture Capital Landscape Series – Limited Partnerships”

新加坡私募和风投行业系列 – 简介篇

近年来,新加坡已迅速成长为全球资产管理行业(资管行业)的中心,众多投资者和资管经理汇集于此。2020 年,新加坡的资产管理总额 (AUM) 增长了 17%,达 4.7 万亿新元,高于 2019 年的 4万亿新元1。 这种强劲的增长是由大量流入的传统和另类投资资金所驱动的,包括私募股权 (私募) 和风险投资 (风投)。 那一年,私募和风投的资产管理总额分别增长了 54% 和 49%,达到 3,750 亿新元和 160 亿新元。 我们认为,新加坡资产管理规模将在未来几年将持续保持增长势头。

Continue reading “新加坡私募和风投行业系列 – 简介篇”

Singapore Private Equity and Venture Capital Landscape Series – A Brief Introduction

Singapore’s asset management industry has fast become a global hub for investors and managers and is central to the country’s financial services industry. In 2020, total assets under management (AUM) in Singapore grew 17 percent to reach S$4.7 trillion, up from S$4.0 trillion in 2019[1]. This robust growth was driven by strong inflows into both traditional and alternative investment strategies, including the private equity (PE) and venture capital (VC) asset classes. PE and VC AUM grew by 54 percent and 49 percent to S$375 billion and S$16 billion, respectively, in that year. In our view, the size of the industry in Singapore will continue to grow in the coming years.

Continue reading “Singapore Private Equity and Venture Capital Landscape Series – A Brief Introduction”

Down Round Fundraising: Some Insights

The spread of COVID-19 has undeniably driven the accelerated adoption of fintech solutions across Southeast Asia and leading fintech start-ups have in recent times found themselves to be in a good position to raise more capital. However, the harsher reality of the pandemic and the economic turmoil has in fact had a significant adverse impact on equity values and valuations of companies across the world, including Southeast Asia.

Start-ups looking to raise capital by across multiple rounds of fund raising may not be able to do so in the usual fashion where each subsequent round is closed at a higher price per share than the last. The spectre of “down rounds” or the issuance of shares at lower prices than previous rounds, is now an increasing reality.

For companies that have issued earlier rounds of convertible preferred equity, a down round is likely to result in the application of anti-dilution mechanisms attached to such preceding preferred equity.

This briefing will look into some anti-dilution mechanisms commonly adopted in convertible preferred equity, highlight the issues that both investors and issuers need to keep in mind when negotiating these provisions and briefly touch on possible alternatives to a down round.

Anti-dilution mechanisms

There are three common types of anti-dilution protection mechanisms used in convertible preferred equity. They are: Continue reading “Down Round Fundraising: Some Insights”

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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