Singapore to top-up SME co-investment programme
Singapore has earmarked an additional SGD 150m (USD 112m) for a co-investment fund that will invest in small and medium-sized enterprises (SMEs) as part of efforts to help local companies scale and become globally competitive.
The SME Co-Investment Fund is run by Temasek Holdings-owned Heliconia Capital Management. It provides initial funding to companies and seeks to catalyse the private sector into contributing additional growth capital. Lawrence Wong, Singapore's deputy prime minister and finance minister, said in his budget statement that the goal is to catalyse SGD 300m in private investment.
To date, SGD 1bn has been committed to approximately 60 Singapore-based companies, which has subsequently raised around SGD 2bn in additional funding. Aggregate revenue generated by these companies has more than doubled since Heliconia invested. In addition, more than half "have developed new capabilities or expanded beyond Singapore," Wong said.
Developing global companies remains a key action point for the Singapore government. To this end, the Singapore Global Enterprises initiative – announced in last year's budget – will receive an additional SGD 1bn in funding. The initiative offers programmes tailored to the specific needs of companies and assistance in securing resources to drive growth and develop R&D capabilities.
Heliconia is responsible for a series of dedicated SME funds: SME Catalyst Fund, which backs third-party funds; and SME Mezzanine Growth Fund, which provides hybrid debt-equity financing; and SME Co-investment Fund. Each one got anchor commitments from the Singapore government and Temasek.
Heliconia claims to invest in growth-oriented SMEs, favouring companies with a strong market position, sustainable competitive advantage, competent management, and the potential to be significant players regionally or globally. Having initially focused on Singapore, the mandate was widened to Southeast Asia, leading to deals in Vietnam and Indonesia.
The overall portfolio – which is not limited to SME Co-investment fund assets – includes the likes of mobile classifieds marketplace Carousell, engineering services group CSE Global, smart devices components supplier Heptagon, gaming hardware and software provider Razer, and mixed martial arts events organiser One Championship.
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