Temasek's portfolio reaches $235b in 2018

Temasek deployed S$29 billion in 2018, significantly higher than the $16 billion invested in 2017 but around the same level as the two years before that. Realizations remained low, however, with S$16 billion divested in 2018 compared to S$18 billion the previous year and S$28 billion in 2016. The one-year return to shareholders dropped slightly to 12% from 13% in 2017.

North America accounted for the largest share of Temasek's new investments, according to a statement, followed by China and Europe. China now comprises 26% of the overall portfolio, up from 25% last year. It is Temasek's second-largest single market behind Singapore, which saw its share fall from 29% to 27%. The rest of Asia represents 15% of the portfolio, up from 14%.

"We are generally positive on the global economy. Political risks and the late cycle expansion do, however, pose some downside pressure in the short term," said Boon-Heng Lim, chairman of Temasek. "Medium-term risks include rising trade and geopolitical tensions, plus monetary and financial stresses in some key economies. These may dampen the potential for global growth. We are tempering our investment pace in the year ahead, but remain open to intrinsically investable opportunities, including counter-cyclical ones."

Exposure to unlisted assets remained steady at 39% of the portfolio in 2018, down slightly from 40% the year before. Traditional financial services remained Temasek's biggest sector exposure at 26%, with technology, media and telecom (TMT) at 21%. Consumer and real estate accounted for 16%, as did transportation and industrials.

Unifying many of the fund's recent investments in the financial services, consumer, life sciences, and agribusiness sectors is a focus on technological disruption to traditional business models. Examples include US-based vegetarian food technology company Impossible Foods and Singapore biopharmaceutical company Tessa Therapeutics. Such technology-enabled investments constitute about 26% of the portfolio, up from 5% in 2011.

Earlier this year Temasek, through its subsidiary Azalea Asset Management, issued $501 million in bonds backed by a portfolio of 36 PE funds, including vehicles managed by The Blackstone Group, KKR, Silver Lake Partners, and TPG Capital, representing a combined value of $1.1 billion. The issuance was the fourth in the Astrea Capital series and the first to feature a tranche open to retail investors.

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