Singapore's Temasek sees portfolio decline due to market volatility

The Singapore government-controlled investment fund said the -9.02% total shareholder return reflected declines in listed investments due to public market volatility, and these had been partially offset by the performance of privately-held assets. Exposure to unlisted assets has increased steadily in recent years, reaching 39% this year, up from 33% in 2015 and 30% in 2014.

New investments for the year to March amounted to S$30 billion, the same as 2015, which represented Temasek's most active year since 2008. Divestments, meanwhile, came to a record high of S$28 billion, up from S$19 billion the previous year. This reflects an ongoing rebalancing of the portfolio.

"The record divestment reflected in part our plan to reshape our portfolio, in line with what we saw were the longer term trends, such as in the financial, life sciences or digital space," said Theng Kiat Lee, executive director and CEO of Temasek International, in a statement. "In general, we also see a more volatile market with a more challenging environment going forward. Meanwhile, we are quite comfortable with the resilience of our portfolio. This gives us a lot of flexibility in addressing some of the longer term opportunities that we are seeing."

For the first time, technology, media and telecom (TMT) became Temasek's largest sector, accounting for 25% of the portfolio, up from 24% last year. It surpassed financial services, which fell to 23% from 28%. TMT exposure is largely driven by ownership of Singapore Telecommunications - the single largest asset in the portfolio - but the technology and media share alone stands at S$14 billion, up from just S$3 billion in 2011. By comparison, telecom has increased to S$46 billion from S$40 billion.

Similar trends are apparent within the financial services segment. DBS Group and China Construction Bank represent Temasek's second and third-largest assets, contributing to S$49 billion in bank exposure. However, the bank share has fallen from S$69 billion in 2011, while non-bank assets such as insurance, payments and financial technology has grown from S$1 billion to S$7 billion.

Over the past 12 months, much of the rebalancing within TMT has taken place in the private markets sphere. Major commitments were made during the period to ride-hailing service Didi Chuxing and online-to-offline services provider Meituan-Dianping in China - both existing portfolio companies that have raised further capital on the back of mergers - as well as to US-based Airbnb. Capital also went to Cainiao, an e-commerce logistics platform created by Alibaba Group.

In technology-enabled financial services, Temasek backed two India-based companies - online payments provider BillDesk and insurance portal Policybazaar. It also participated in funding rounds for US-based SoFi and C2FO.

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• Topics
• Southeast Asia
• LPs
• Performance
• Singapore
• Temasek Holdings