GIC posts weakest return in eight years, warns of uncertainty ahead

The group - which claims to have invested well over $100 billion while independent assessments put its wealth at more than $300 billion - posted a 20-year annualized return of 3.7% for the 12 months ended March 2017. It is the lowest figure since 2009 and follows returns of 4% in 2016 and 4.9% in 2015.

“We are prepared for a period of protracted uncertainty and low returns,” said Chow Kiat Lim, GIC’s CEO, in a statement. He noted that the fund has taken a relatively cautious stance in response to stretched valuations, policy uncertainty and unresolved economic imbalances. This involves having diversified exposure across multiple asset classes, regions, return drivers, and risk thresholds.

There was minimal change in the composition of GIC's portfolio during the 12 months to March, with the PE allocation remaining at 9% and real estate at 7%. Exposure to emerging markets equities fell by two percentage points to 17%, while allocations to developed market equities and bonds and cash both rose by one percentage point to 27% and 35%, respectively.

On a geographical basis, GIC's largest single market is the US on 34%. This is followed by Asia ex-Japan on 19% and the Eurozone and Japan, which are both on 12%. 

At the start of the year, the sovereign wealth fund completed some significant people moves, with Lim, who was previously group CIO, assuming the role of CEO following the retirement of Siong-Guan Lim. This triggered further movements in the ranks directly below, with Jeffrey Jaensubhakij taking over as CIO, relinquishing his position as deputy CIO and president for public markets.

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• Topics
• Southeast Asia
• LPs
• Performance
• Singapore
• GIC Private