Singapore’s economy expanded 5.7% year on year in the fourth quarter of 2025, fuelled by AI-related semiconductor demand and output growth in pharmaceutical manufacturing.
But for the small and medium-sized enterprises employing the bulk of Singapore’s workforce, the picture has been more complicated. Southeast Asia-focused venture capital funds recorded just four final closes in all of 2025, down from 33 two years earlier, and traditional bank lending to SMEs has remained constrained, prompting the government to launch a S$1 billion Private Credit Growth Fund, and pushing many companies, toward faster but less flexible financing options.
In a recent op-ed, Alvin Yap, chief executive of Singapore for equities-backed financing firm Equities First Holdings, has called this divergence the backdrop for a broader question about how Singapore’s expanding private wealth might be put to work. His argument centres on Singapore’s single-family office sector, now numbering more than 2,000. Most of the capital tied to this sector currently sits in listed equities and global investment funds. Redirecting even a portion of it toward startups and SMEs, Yap contends, could help close financing gap that government programmes alone have not been able to fill.
Startup finance dries up
Small and medium-sized enterprises account for 99% of Singapore’s businesses and employ around 70% of its workforce, according to the National Trades Union Congress.
At the start of 2025, fewer than half of SME owners expected business conditions to improve in the near term, according to a survey published in early 2025. That reading was captured before the onset of fresh geopolitical instability in the Middle East, which has since put additional pressure on regional trade flows. Many SMEs carry debt accumulated during the Covid-19 pandemic. Traditional bank lending has not filled the gap.
The Singapore government moved to address the financing shortfall with direct intervention. Its 2025 private credit fund was introduced to provide non-dilutive, customised financing for high-growth local enterprises. Apollo Global Management was appointed as fund manager. A new growth-capital working group was established to build a clearer pipeline from startup to IPO, with a stated mandate to close the gap between private capital and public markets.
These measures target the upper tier of high-growth businesses. The structural gap in growth-stage financing for the broader population of SMEs and earlier-stage startups remains open.
An underdeployed capital base
A different category of capital has been growing rapidly in Singapore throughout the same period. The count of single-family offices in the city-state rose from around 400 in 2020 to more than 2,000 by the end of 2024, a 43% increase in a single year, according to data from the Monetary Authority of Singapore. Singapore’s monetary authorities have reduced documentation requirements and streamlined reporting to sustain the pace of registration.
Writing in The Business Times in April 2026, EquitiesFirst‘s Yap raised the question of whether this capital concentration could be directed to improve the broader economy as SMEs face funding gaps. “Policymakers are increasingly asking whether the city-state’s expanding pool of private capital can also help fund its real economy,” he wrote.
Most of the capital currently held in Singapore’s family offices sits in listed equities, REITs, and global investment funds. Singapore already links tax incentives for family offices to requirements for local investment activity and philanthropic contribution, but these can largely be satisfied through listed market exposure, without necessarily allocating to startups or SMEs.
As the family office sector has expanded sharply some have argued that there is an opportunity for productive financing of Singapore’s startup and SME ecosystem.
International evidence
There is international evidence to support this thesis. A survey of 64 European venture capital firms published by Sifted in December 2024 found that family offices and high-net-worth individuals were the most common category of limited partner, present in 84% of the funds surveyed. Family offices were also described as the easiest LP type to raise from. Their longer investment horizons and more flexible mandates often make them better suited to venture fund structures than institutional allocators with strict quarterly performance requirements.
In the United States, family offices have for decades provided capital to fund early-stage innovation prior to institutional investment.
“In markets such as the U.S. and parts of Europe, family offices already play an influential role in venture funding, providing patient capital that often bridges the gap between early-stage innovation and institutional investment,” Yap wrote.
For family offices considering expanded allocations to private markets, liquidity management across existing holdings becomes a practical constraint. Moving capital into illiquid venture or SME positions alongside listed equity portfolios requires instruments that allow investors to deploy without divesting core assets.
“Equity-linked financing offers one potential way for family offices to unlock liquidity from existing portfolios,” Yap noted, “allowing them to deploy capital to the growth funding needs of startups and SMEs without divesting core holdings.” Firms like EquitiesFirst, which specialise in securities-backed financing, could see growing interest from family offices managing this kind of portfolio reallocation.