Temasek reports record net portfolio of $235 billion
Temasek’s one-year total shareholder return stood at 12.19%, with compounded annualised returns of 15% since inception in 1974, the investment firm said in a statement
Mumbai: Singapore state-owned Temasek’s net portfolio value hit a record high of S$308 billion ($235 billion) for the financial year ended 31 March, the investment firm said in a statement on Tuesday.
Temasek has offices in Singapore, New York, San Francisco, Washington D.C., São Paulo and Mexico City, London, Beijing, Shanghai, Mumbai and Hanoi.
“Our net portfolio value passed the S$300 billion mark for the first time. It is now almost three times the dotcom peak of just over S$100 billion at the turn of the millennium. We continue to reshape our portfolio in line with our views of key long-term trends. This on-going active investment stance is focused on solutions for a better, smarter and more connected world over the medium to long term,” said Lee Theng Kiat, executive director and chief executie officer (CEO), Temasek International.
Temasek’s one-year total shareholder return stood at 12.19%, with compounded annualized returns of 15% since inception in 1974, the statement said. Dividend income from its portfolio was recorded at S$9 billion for the financial year.
In 2017-18, Temasek invested S$29 billion and divested investments worth S$16 billion, the statement added. However, it expects global growth to moderate.
“We see the probability of increased downside risks in the near term. Our balance sheet and portfolio resilience give us the flexibility to ride out short-term market volatility, while delivering sustainable returns over the long term,” said Sulian Tay, managing director, investment, Temasek.
“Given the market outlook, we may recalibrate and slow our investment pace over the next nine to 18 months,” said Alpin Mehta, managing director, investment, Temasek, adding that there may not be a robust pipeline of opportunities for this year. “In particular, we will actively seek attractive opportunities in promising sectors and markets driven by transformational technologies, demographic shifts and changing consumption patterns,” he added.
With a shift in focus, nearly half of Temasek’s new investments of S$13 billion were in technology, life sciences, agribusiness, non-bank financial services and consumer sectors. “Our exposure to these focus sectors now constitutes about S$80 billion, or 26% of our total portfolio. This is up nine times from S$9 billion, or an equivalent 5% share of a smaller portfolio in 2011,” the company said.
Technological advances, demographic shifts and changing consumption patterns are disrupting traditional business models and creating new opportunities for investors, Temasek said. “We are approaching these opportunities through six key trends: longer lifespans, rising affluence, sustainable living, smarter systems, the sharing economy and a more connected world, which will drive solutions and opportunities for a better, smarter and more connected world,” the investment firm said.
The Singapore-based global investor is also keen on investing in early-stage companies, both directly and indirectly, and has already built a substantial portfolio of such investments. Temasek’s early-stage investments have focused on agribusiness, healthcare and digital media.
“These early-stage investments, including indirect investments through venture capital funds, now constitute just under 3% of our portfolio. These higher risk, and sometimes longer-term, investments are one way for us to seed new solutions and capabilities, and deliver higher returns in aggregate over the longer term,” said Temasek.