Last year was supposed to be the year Singapore's economic momentum became broadly visible. Manufacturing output surged on AI-related semiconductor demand. Pharmaceutical production ran hot. The economy expanded 5.7% year on year in the fourth quarter of 2025 and 4.8% for the full year. For the companies concentrated in advanced manufacturing and high-value services, the period could barely have been better.
For the 99% of Singapore's enterprises classified as small or medium-sized, the same period looked quite different. This group employs around 70% of the city-state's workforce, yet 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. Many are still carrying debt from the COVID-19 pandemic. Bank lending remains constrained.
The gap has raised a question that has been gaining traction among Singapore's policymakers and investors: whether the enormous pool of private wealth now concentrated in the city-state could be beneficially directed, even partially, toward funding Singapore's startups and SMEs.
It is a question Alvin Yap, chief executive of Singapore for EquitiesFirst Holdings, put directly to The Business Times in an op-ed published in April 2026.
"It would be no surprise if policymakers increasingly were to see family offices not merely as wealth preservation vehicles, but as potential providers of patient capital capable of supporting the country's next phase of economic expansion," he wrote.
A Drought in Growth Capital
The venture capital ecosystem that might otherwise help bridge this gap has retrenched. Final fund closes for Southeast Asia-focused VC managers fell to four for the full year 2025, down from 33 in 2023, according to DealStreetAsia's annual review.
Singapore specifically recorded only one fund reaching final close last year, compared with 21 in 2023. Extended high interest rates dampened LP appetite for illiquid, long-horizon commitments. Notable exits remained scarce across vintages from 2019 onwards. The eFishery fraud, in which an Indonesian aquaculture startup once valued at US$1.4 billion collapsed after its co-founder admitted to falsifying financial records for years, contributed to a regional confidence crisis that further reduced investor appetite.
The Singapore government introduced a S$1 billion Private Credit Growth Fund in 2025, with Apollo Global Management appointed as its manager, to address the most critical gaps at the high-growth end of the market.
A new growth-capital working group was also established to close the structural gap between private capital and public markets. These interventions target specific segments of the financing ecosystem, but they do not fully address the credit conditions facing many Singapore's SMEs.
The Family Office Opportunity
At the same moment the VC ecosystem contracted, a different kind of capital was arriving in Singapore at speed. The number of single-family offices registered in the city-state rose from around 400 in 2020 to more than 2,000 by the end of 2024, a 43% increase over 2023 alone, according to MAS data.
EquitiesFirst's Yap, whose firm provides securities-backed financing to institutional investors and family offices, argues that the capital and the need are in the same city, and that there is an opportunity for mutual benefit given the right financing conditions.
Most of Singapore's family office wealth currently sits in listed equities, REITs, and global investment funds. Singapore's tax incentives for family offices already require some allocation to local investment and philanthropic activity, but these requirements can largely be satisfied through listed market exposures rather than private market participation.
Building the Bridge
The international precedent for a different relationship between family office capital and venture funding is well established. A survey of 64 European VC firms published by Sifted in December 2024 found that family offices and high-net-worth individuals were present as limited partners in 84% of the funds surveyed, the most common LP category across the sample.
Longer time horizons and more flexible mandates can make family offices better suited to venture fund structures than most institutional allocators, but Yap acknowledges the weight of the operational requirement on the family office side.
"Deploying capital into private markets demands deeper due-diligence capabilities, stronger risk-management frameworks and greater familiarity with venture and SME lending strategies," he wrote.
Family offices may need to add headcount and build co-investment relationships with banks and specialist managers to share risk across the deal flow they could not independently assess.
For family offices already holding substantial equity portfolios, the liquidity dimension of any shift toward private markets is also material. But taking on illiquid venture or SME positions alongside existing listed holdings creates portfolio constraints that equities-based financing can address. Firms like EquitiesFirst provide capital against existing equity positions; investors can take on new allocations without selling core assets. Such arrangements could see increased demand from family offices making exactly this kind of portfolio adjustment.
"If Singapore succeeds in linking its expanding private-wealth sector with the financing needs of startups and SMEs," Yap wrote, "family offices could become a powerful new pillar of domestic capital formation."
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