GIC's PE allocation unchanged as 12-month overall return rises

The group - which claims to have invested well over $100 billion while independent assessments puts its wealth at more than $300 billion - noted that increases in asset prices have not been matched by improvements in economic growth and earnings.

"Current valuations are high, pointing to a more difficult future investment environment with lower broad market returns and higher volatility," Lim Chow Kiat, GIC's CIO, said in a statement attached to the 2014-2015 annual report.

Having upped the private equity allocation from 8% in 2013 to 9% last year, the sovereign wealth fund has made no further change. Real estate also remains at 7%, the only alterations being a one percentage point increase for nominal bonds and cash to 32%, while emerging markets equities fell one percentage point to 18%.

In terms of geography, GIC upped its Asia allocation to 30% from 27%. This was due to increases in the weightings for the Asia ex-Japan markets. As of March 2015, the fund had a further 43% of its assets in the Americas and 25% in Europe. The Australasia allocation held steady at 2%.

GIC's invest approach is guided by a reference portfolio, which mandates a 65-35 split between global equities and global bonds and is intended to deliver stable returns above inflation. Then there is a policy portfolio that targets improved long-term returns in six core asset classes (including 11-15% for PE and 9-13% for real estate) and an active portfolio that allows the fund to pursue opportunistic strategies.

GIC's private equity and infrastructure group invests through funds across buyouts, venture capital, and special situations such as mezzanine debt, distressed debt and secondaries. It has a network of more than 100 active fund managers. GIC also commits capital directly to deals, generally minority equity positions and mezzanine financing for buyouts.

Temasek Holdings, an investment entity controlled by the Singapore government, earlier this month announced a 19.2% total shareholder return for the year ended March 2015. Total assets reached S$266 billion - a gain of S$43 million. It made new investments of S$30 billion and generated record divestments of S$19 billion, largely driven by strong public markets.

Temasek, which makes direct private markets investments and allocates capital to third-party managers through entities such as Pavilion Capital, does not specify a PE allocation. However, 33% of its holdings were in unlisted assets as of March, up from 30% a year earlier.

 

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