Temasek opens up PE portfolio to outside investors
Temasek Holdings has launched a co-investment vehicle, allowing six outside institutional investors exposure to its PE funds portfolio. It is part of a broader effort to include new investors that will ultimately involve retail participation.
Ardian, formerly known as Axa Private Equity, is one of the six co-investors and has been appointed general partner and manager of the vehicle. It provided an independent valuation of the portfolio that has been set for all investors.
Temasek is the single largest shareholder with a 38% in the vehicle, known as Astrea II. It has broadly diversified holdings in 36 funds, selected to provide balanced exposure across vintages, geographies and sectors. Temasek will remain actively engaged with the funds that have been injected into the vehicle.
The initiative follows Astrea I, which was launched in 2006 and represented a first step in the Singapore state investor's efforts to broaden its co-investor base.
"Platforms such as Astrea I and Astrea II are part of our phased approach to developing co-investment products," said Theng Kiat Lee, president of Temasek, in a statement.
"They help us test market interest and fine tune our thinking and product positioning for eventual participation by retail investors. When we are ready to launch suitable products for the retail market, we hope that retail investors in Singapore will welcome such opportunities to co-invest with us."
He added that Temasek is mindful of the risk-return preferences of retail investors and would therefore start by offering bonds before moving on to higher risk products.
The fund saw its portfolio grow to S$215 billion ($169 billion) for the year ended March 2013, up 8.6% from the preceding 12 months. Temasek remains primarily a direct equity investor, with about 10% of its portfolio in third-party managed funds.
In 2012, it launched Pavilion Capital, an investment vehicle that supports small- and medium-sized privately-owned businesses in north Asia, mostly through backing smaller regional GPs.
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