Temasek Holdings
Temasek Holdings (Private) Limited is a Singaporean state-owned multinational investment firm founded on 25 June 1974.
Headquartered on Orchard Road in Singapore, Temasek has grown to manage a net portfolio of S$389 billion (US$288 billion) as of 2024.
It operates as an active investor and shareholder with a global presence, maintaining 13 offices across 9 countries, including Beijing, London, New York, and Paris.
Temasek’s investments span a wide array of industries, with a focus on long-term structural trends like digitization, sustainable living, and longer lifespans.
History
Establishment and Early Years
Temasek was established to manage and hold assets previously owned by the Singaporean government. These assets included stakes in local companies such as Malaysia-Singapore Airlines (later split into Singapore Airlines and Malaysia Airlines), the Singapore Telephone Board (which became Singtel), and Keppel Shipyard.
By consolidating these holdings under Temasek, the government sought to allow ministries to focus on policymaking while Temasek operated on a commercial basis.
Temasek’s initial portfolio included a mix of public sector entities and commercial ventures, ranging from shipyards to a bird park. This diversification laid the foundation for Temasek’s role as a strategic investor.
Corporate Structure and Governance
Temasek operates under the Singapore Companies Act and is designated as a Fifth Schedule entity under the Singapore Constitution.
This designation imposes safeguards to protect national reserves, including requiring presidential approval for transactions likely to draw on past reserves.
While wholly owned by the Singapore Minister for Finance, Temasek functions as an independent investment company with its own board of directors and management team. Unlike traditional sovereign wealth funds, Temasek:
- Invests primarily in equities.
- Pays taxes as a commercial enterprise.
- Reports its financial results through publicly available annual reviews.
Temasek has maintained AAA credit ratings from Moody’s and Standard & Poor’s since its inaugural ratings in 2004, reflecting its financial stability.
Investment Philosophy and Portfolio
Temasek's investment strategy focuses on four structural trends:
- Digitization: Investments in technology companies and startups.
- Sustainable Living: Supporting green energy and sustainable practices.
- Future of Consumption: Innovations in food, retail, and consumer goods.
- Longer Lifespans: Investments in healthcare and biotechnology.
Key Sectors
Temasek’s portfolio spans diverse industries, including:
- Consumer, Media & Technology: Investments in global tech companies and platforms.
- Life Sciences & Agri-Food: Supporting advancements in food security and healthcare.
- Non-Bank Financial Services: Diversifying into insurance and fintech.
As of 2024, 64% of Temasek’s portfolio is anchored in developed economies, with the remaining exposure in emerging markets, particularly in Asia.
Notable Investments
- BlackRock Inc.: A 3.9% stake valued at US$3.5 billion as of 2020.
- Singapore Airlines: A foundational holding since Temasek’s establishment.
- FTX: A controversial investment in the cryptocurrency exchange, which was written off in 2022 following FTX’s collapse.
Historical Milestones
Controversies
In 2006, Temasek’s acquisition of Shin Corporation, a Thai telecom company, sparked significant political unrest in Thailand. The deal, tied to then-Prime Minister Thaksin Shinawatra, led to protests and a political crisis that culminated in Thaksin’s removal from office.
Global Expansion
In the 2000s, Temasek began expanding its portfolio into international markets, investing in industries such as agriculture, technology, and clean energy. This global outlook has positioned Temasek as a key player in shaping economic trends across Asia and beyond.
Sustainability and Climate Commitments
Temasek has committed to achieving net-zero carbon emissions by 2050. It has been carbon-neutral as a company since 2020 and aims to reduce portfolio emissions to 50% of 2010 levels by 2030. Sustainability-aligned investments accounted for 12% of its portfolio in 2024, amounting to S$44 billion.
Performance
Temasek’s returns are measured through Total Shareholder Return (TSR):
- One-Year TSR (2024): 1.60%.
- 10-Year TSR: 6% annually compounded.
- 20-Year TSR: 7% annually compounded.
- Since inception (1974): 14% annually compounded over 50 years.
Comparison with Other Singaporean Funds
Temasek differs from Singapore’s other sovereign wealth entities:
- GIC Private Limited: A more traditional sovereign wealth fund managing approximately US$744 billion in assets as of 2022.
- Central Provident Fund (CPF): A national pension scheme with assets totaling US$397 billion.
Together, these institutions provide Singapore with publicly known assets under management (AUM) of approximately US$1.64 trillion.