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SINGAPORE (Reuters) -Singapore’s Temasek Holdings reported a 25% rise in its portfolio value to a record S$381 billion ($282 billion) in the year ended March 2021, with gains powered by a global equities rally and the public listing of some of its holdings.
Ranked among the biggest investors in the world, Temasek is anchored in Asia, with a 64% exposure to the region as measured by underlying assets of its portfolio companies, most of which are in China and Singapore.
The increase in its portfolio value was the highest in a decade and came after a 2.2% drop in the previous year, with the state investor notching up record investments and divestments in the latest year, Temasek executives told a news conference on Tuesday.
“The pandemic has accelerated the longer term trends that shape our investment posture. This is especially so for the digitisation trend,” said Mukul Chawla, joint head of Temasek’s telecoms, media and technology investments.
Chawla said the shift to work from home had generated demand for online services, payments, digital health and technology platforms, spurring some of Temasek’s privately held companies to go public.
Airbnb and food delivery firm Doordash were some of the investor’s portfolio firms that had public listings.
“The pandemic and recession presented a huge opportunity for sovereign wealth funds like Temasek with strong holding power to deploy their funds when markets sold off,” said Chua Hak Bin, economist at Maybank Kim Eng.
Companies in its tech portfolio in China — ride-hailing giant Didi Global and Alibaba (NYSE:BABA) fintech affiliate Ant Group — have become targets of regulatory clampdowns in recent months.
Temasek executives said these are unlikely to lead to any shift in Temasek’s investment strategy, and that they remained optimistic on opportunities in China and the companies.
“It’s not just in China that we are mindful of regulation and changing regulation. So I don’t believe it changes our stance on China in any way,” Chawla said. “We will continue to invest, we will consider regulation as it comes forth.”
Unlike many state investors, the majority of Temasek’s investments are in equities, with unlisted assets making up 45% of its total portfolio.
After falling sharply in the first quarter of 2020 as COVID-19 broke out, global equities staged a powerful rally, with MSCI’s Asia shares ex-Japan index surging 55% in the year to March 31, 2021 and Singapore’s Straits Times index rising 28%.
The global stock market rally also boosted Japan’s Government Pension Investment Fund, which earlier this month declared a record investment return of 37.8 trillion yen ($338.8 billion) for the year ended March 31.
Temasek’s key public holdings include DBS Group (OTC:DBSDY), China Construction Bank (OTC:CICHF), Alibaba Group and Standard Chartered (OTC:SCBFF).
Temasek’s one-year total shareholder return rose to 24.54% in the year to March, rebounding from a negative 2.28% a year earlier.
The Americas once again accounted for the largest share of new investments made by Temasek last year, followed by Singapore and China.
($1 = 1.3505 Singapore dollars)
