On 27 March 2025, the Monetary Authority of Singapore (MAS) released a consultation paper proposing a new regulatory framework to allow retail investors to access private market investments through authorised long-term investment funds (LIFs).
Introduction to LIF framework
The primary goal of the LIF framework is to provide retail investors with access to private market investments in a risk-calibrated manner, enhancing their investment portfolio diversity.
The framework proposes two possible structures for LIFs as follows:
- Direct fund: A fund structure that makes direct private market investments
- Long-term investment fund-of-funds (LIFF): A fund structure that primarily invests in private market investment funds
The proposed framework allows for both listed and unlisted structures, providing flexibility for investors with different liquidity preferences.
It builds upon existing requirements, adapting and adding safeguards to the context of private market investments.
Scope of private market investment assets
The proposed framework includes private equity, private credit, real estate, and infrastructure as potential asset classes for LIFs.
Real estate is excluded from the direct fund structure as existing regimes, such as real estate investment trusts (REITs), that currently allows retail access to real estate investments.
Regulatory requirements for direct funds
- Manager requirements: Managers of direct funds must be retail licensed fund management companies (LFMCs) with a certain track record and experience in managing private market investments.
- Product requirements: Direct funds should be primarily invested in private market investments that meet specific criteria, such as private equity companies with a minimum valuation and private credit investments backed by collateral.
- Disclosure requirements: Enhanced disclosure requirements, including risk warnings and additional prospectus disclosure requirements, are proposed to ensure transparency for retail investors.
Regulatory requirements for LIFFs
- Manager requirements: LIFF managers must be licensed as retail LFMCs, manage at least S$1 billion in private market investments, and have experienced individual representatives.
- Product requirements: LIFFs should be primarily invested in unlisted private market investment funds that meet specific conditions, such as the underlying private market investment assets being directly managed by a manager separate from the LIFF manager and the underlying private market investment funds aggregating investors other than the relevant LIFF.
- Disclosure requirements: Enhanced disclosure requirements, including risk warnings and additional prospectus disclosure requirements, are proposed to ensure transparency for retail investors.
Additional safeguards and considerations
Both direct funds and LIFFs must undergo independent valuations periodically.
Restrictions on leverage are proposed to ensure that funds do not take on excessive risk.
Unlisted LIFFs must offer redemption at least once a year, with specific gating limits and timelines for processing redemption requests.
Feedback and next steps
MAS invites feedback from all interested parties on the proposed framework. Reed Smith is responding to this and will be happy to include your feedback in such response. The consultation period closes 26 May 2025.
Conclusion
The LIF framework proposed by MAS represents a significant step towards democratising access to private market investments for retail investors in Singapore.
By implementing robust regulatory safeguards, MAS aims to create a sustainable and diversified investment landscape.
Please reach out our Reed Smith contacts below if you wish to participate in our response to MAS.
Client Alert 2025-099
