Temasek sees portfolio shrink, ups investment pace

The Singapore government-controlled investment fund's net portfolio fell to S$306 billion for the 12 months ended March from S$313 billion a year earlier, while the one-year total shareholder return was -2.28%, the first time it has entered negative territory in four years. Deputy CFO Chin-Yee Png blamed the decline on a drop in the mark-to-market value of Temasek's public portfolio, noting that a "very resilient private book" and a large cash balance entering the crisis had mitigated the impact.

The unlisted assets share of the portfolio rose from 42% to 48%, largely due to the drop in public market valuations. However, it is also indicative of a structural trend, given unlisted assets accounted for just 23% in 2010. The bulk of this value comes from large businesses like real estate manager Mapletree Investments, SingPower, port operator PSA International, and retailer A.S. Watson. Only 5% – a still sizeable S$15 billion – is in earlier stage private companies.

Financial services remains Temasek's largest sector but its share fell to 23% from 25%. Meanwhile, technology, media and telecom (TMT) rose from 20% to 21% and life sciences and agribusiness climbed from 7% to 8%. Five years ago, the life sciences share was just 3%.

The fund highlighted a string of global investments across the latter two sectors. They included big data player MiningLamp and Aier Eye Hospital, drug developer Ocumension Therapeutics, and short video platform Kuaishou Technology in China, and rewards and discovery platform ShopBack and alternative protein player Growthwell Group in Singapore.

Png noted that some of the digitization trends that have been accelerated by COVID-19 – with some companies seeing two to three years of growth pushed into the first half of 2020 – are here to stay.

"We're all now ordering groceries from the leisure of our homes instead of going, you know, to the supermarkets. And on the back of that, we also see an acceleration in payments trend and that's really tied to both e‑commerce but also penetration of digital payments rather than using cash because we don't want to have cash changing hands. We see these trends here to stay but they're not going to go away just because COVID has passed," she said.

Temasek's long-term strategy continues to be anchored in transforming economies, growing middle-income populations, deepening comparative advantages, and emerging champions. China has overtaken Singapore as the largest geography represented in the portfolio with 29%. Asia as a whole accounts for two-thirds of the portfolio, with North America on 17%.

Michael Buchanan, Temasek's head of macro strategy, warned that the global economic outlook remains volatile and uncertain, largely due to concerns about tensions caused by the US-China strategic rivalry and the impending US election. "These would likely create a more challenging environment for long term investors and asset owners," he said in a statement.

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• Topics
• Southeast Asia
• LPs
• Performance
• Singapore
• Temasek Holdings
• covid-19
• coronavirus
• Sovereign wealth fund