Retail investors in Singapore may soon gain access to private market investments once reserved for institutions and the ultra-wealthy. In a move that could reshape how individuals across Asian markets invest, the Monetary Authority of Singapore (MAS) has proposed a new framework — long-term investment funds (LIFs) — aimed at expanding access to private equity, credit, and infrastructure. If adopted, this will mark a significant step toward democratizing private markets, and other markets in the region are likely to take notice.
As appetite for alternative assets grows, Singapore’s approach could become a model for regulators across the region that strikes a balance between innovation and investor protection. Access to private markets is already undergoing a broad rethinking in the United States and Europe, and large US private investment funds like Apollo and Ares are creating liquidity options for retail investors in Europe. For asset managers, the proposal raises a compelling question: could the Singapore market become the launchpad for a new generation of retail-accessible private market strategies?
At its core, the MAS’s recently released consultation paper makes the regulator’s intention clear: to provide less sophisticated investors with access to higher-yielding, longer-dated assets. But the paper also highlights the MAS’s awareness of the risks inherent in private markets, particularly for investors unfamiliar with illiquidity, limited price discovery, and asymmetric information.
Asia Catching Up
Retail and institutional interest in private markets is rising globally, and the appeal is easy to understand. Investors, frustrated by shrinking opportunities in public markets and seeking diversification in a volatile macro environment, are looking to alternative assets. Digital platforms have lowered the barriers to entry, and fintech innovation is making it easier to distribute and manage private funds efficiently. Singapore, a long-time hub of financial innovation, is already home to firms exploring creative solutions to challenges like minimum investment thresholds and liquidity.
Against this backdrop, regulators in the West have moved quickly. The United Kingdom’s Long-Term Asset Fund (LTAF) regime was broadened in 2023 to include retail investors, while the EU updated its European long-term investment fund (ELTIF) regulations to encourage greater retail participation. The MAS appears to be drawing on these developments — but in the trade-off between broader access and investor safeguards, it seems to lean slightly more toward the latter.
The LIF Framework
MAS’s proposed long-term investment fund framework introduces two structures:
- Direct funds, which invest directly into private assets such as private equity, private credit, or infrastructure projects.
- Long-term investment fund-of-funds (LIFFs), which invest primarily in other private market investment funds.
Both structures are designed to thread carefully between access and safeguards. For instance, MAS is considering rules around manager qualifications, minimum redemption frequencies, valuation requirements, and investor disclosures.
One of the more thoughtful aspects of the proposal is its approach to risk calibration. MAS proposes limiting direct funds to private assets with a lower risk-return profile like senior secured loans or income-generating infrastructure, at least in the initial rollout. LIFFs, on the other hand, by virtue of their diversification, may have broader investment mandates, though they will still need to satisfy due diligence, governance, and transparency thresholds.
The framework also includes discussions around:
- Manager “skin in the game” requirements, which would require that managers invest their own capital.
- Smart money anchors, i.e., ensuring a minimum stake from institutional or accredited investors to de-risk the product.
- Redemption gates, to protect fund stability during periods of market stress.
- Risk classification, with listed LIFs potentially exempted from complex product treatment, akin to REITs.
I’ve long maintained that mass affluent retail investors deserve access to private market investments — provided the manager has meaningful skin in the game and the product is anchored by institutional capital. If regulators permit retail access to high-risk, highly liquid assets like meme coins and options trading, then it’s inconsistent to bar professionally sourced private investments solely on the basis of liquidity.
MAS is moving in the right direction — supporting access while acknowledging the need for safeguards. Redemption gates, for example, serve as a healthy reminder that these are not liquid products. But regulation alone isn’t enough; MAS should also emphasize investor education around the potential benefits of illiquidity, not just the risks.
What Does This Mean for Asset Managers?
For asset managers operating in Singapore’s alternatives space, the proposed regulatory framework presents a significant opportunity to unlock a new channel for capital raising. The ability to distribute private funds to retail clients within a regulated and standardized wrapper could support product innovation at scale, at the same time forcing asset managers to improve governance, operational readiness, and transparency.
For digital platforms and fintech firms, the LIF framework may provide the legal and regulatory infrastructure needed to develop new distribution models. This is especially relevant for tokenized private assets or fractionalized fund exposure, where Singapore is already leading the way. Singapore’s push could also serve as a template for other Asian markets where retail demand for alternatives is growing but access remains limited.
A Measured Step Forward
Retail investors in Asia and elsewhere should not underestimate the risks of private markets, particularly the challenges of illiquidity and opacity[1] both in structure and valuation. Even with more creative liquidity options, private markets are unlikely to resemble public market investments. That distinction needs to be made clear.
The lack of timely performance data is another concern, but more of a psychological one; it’s a heuristic called illusion of control. MAS must ensure that suitability checks, disclosure standards, and marketing practices are up to par to build and maintain investor trust. In the United States, implementing the Securities and Exchange Commission’s Marketing Rule remains a significant compliance focus.
That said, this consultation sends a clear signal that Singaporean authorities want to lead not only in institutional capital markets but also in private market regulation in Asia — a key move to attract more capital to the city-state.
The consultation closed on May 26, and industry feedback will be essential to shaping a framework that is both innovative and resilient. If done right, the LIF regime could become a cornerstone of the next-generation private markets ecosystem in Asia. Trillions of dollars from mass affluent investors, looking for potential opportunities to differentiate exposure, await.
[1] Paraphrasing the consultation paper — “A Direct Fund may only transact with an interested party if the price matches that of concurrent third-party transactions or is supported by two independent valuations — one commissioned by the trustee or independent Variable Capital Company (VCC) directors — ensuring the purchase price does not exceed the higher valuation, or the sale price is not below the lower. The transaction must be confirmed as fair and on normal commercial terms by the trustee or directors, and any fees paid to the interested party must be equal to or less than those paid by third parties.”
