The firm has seen success following the launch of its open-ended public market and closed-ended private market funds.
Singapore-based external asset manager (EAM) Paragon Capital Management has been strengthening both its discretionary portfolio management (DPM) and fund management businesses.
The majority of its assets under management (AUM) stem from DPM portfolios, but its five funds have also gained significant traction, its CEO Paul Lee tells Citywire Asia.
‘We have adopted the discretionary model 100%,’ said Lee, echoing the strategy of many EAMs in the region who are seeing success in providing accountability of performance.
The firm’s fund business includes three open-ended public market funds and two closed-ended private market funds utilising the VCC structure, which have resonated well with clients, said Lee.
The open-ended funds cover global equities, fixed income, and alternative asset classes. Paragon Alpha I holds $171m, the Income I fund has raised $123m, and the global equity fund manages $87m, Lee said.
One of the closed-end private market funds, launched in 2021, focuses on early-stage venture capital. It has completed its investment phase, exited one portfolio company, and retains 10 others in deep tech, software and battery recycling.
‘The fund is relatively small, starting with a S$11m ($8.6m) commitment,’ Lee said
The second private market fund, co-managed with a Singapore-based real estate specialist, targets private equity and real estate. It has raised $43m last year, completing the first year of deployment with five more to go, the CEO said.
‘We launched the real estate fund when US interest rates were high, which created stress for existing real estate owners, making the space a rich hunting ground for us,’ Lee said. ‘If the interest rates continue on a downward trajectory, we will have the ability to exit the positions at favourable prices down the road.’
The five funds account for roughly 40% of Paragon’s S$1.2 billion AUM, with DPM portfolios comprising the remainder.
Lee ensures that the firm maintains clear separation between its DPM and fund segments to avoid conflicts of interest.
‘We ensure independence by auditing and administering those funds and do not move clients automatically into our funds,’ he said. ‘Rather there is a rigorous screening process and if, for example, our Paragon Income fund comes to the fore of that, then we will suggest it.’
Driving AUM
Paragon is a lean team of four advisors in Singapore and recently received its SFC licence in Hong Kong last December. Hong Kong-based CEO Arthur Fong, who joined in 2024, is leading the North Asia expansion, focusing on Greater China.
‘We see a huge potential [in Hong Kong] but we know we are starting from ground zero,’ Lee said. ‘We have started with two advisors there and so we have space to hire.’
Till date, the lion’s share of the AUM is from Singapore, with Malaysia and Thailand also showing strong potential.
Lee does not rule out the inorganic path to growth – acquisitions – should the ‘right synergies and value add’ arrive.
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Credit: Citywire Asia (By Priyanka Boghani)