The state investor posted a 1.6% annual shareholder return, rebounding from last year’s negative 5.07%.
SINGAPORE: Temasek Holdings reported a S$7 billion increase in its net portfolio value, reaching S$389 billion as of March 31, 2024. The growth was driven by strong returns from investments in the U.S. and India, offsetting underperformance in China.
The state investor achieved a 1.6% annual shareholder return, recovering from last year’s negative 5.07%—its worst performance since 2016. Temasek’s long-term 10-year shareholder return held steady at 6%, while its 20-year return dipped to 7% from 9%, reflecting the exclusion of the strong post-SARS recovery year in 2004.
Resilient Investment Strategy
Temasek maintained a cautious but steady investment pace amid global uncertainties, investing S$26 billion while divesting S$33 billion, resulting in a net divestment of S$7 billion. Significant divestments included bond repayments by Singapore Airlines and share redemptions by Pavilion Energy.
The firm continues to align its investments with four structural trends—digitization, sustainable living, future consumption, and longer lifespans. These focus areas have grown to represent 39% of Temasek’s portfolio, up from 13% in 2016.
Transportation, industrials, financial services, and emerging sectors such as AI and healthcare remained key areas of focus.
Geographic and Sector Highlights
Singapore remains the largest share of the portfolio at 27%, followed by the Americas at 22%. While investments in the U.S. grew, China’s share decreased from 22% to 19% due to structural challenges and geopolitical tensions. Temasek has pivoted its China strategy toward domestic-oriented businesses in sectors like biotech, electrification, and EV value chains.
India saw increased investments, particularly in consumer, healthcare, and financial services, reflecting growing opportunities in these sectors.
Globally, the U.S. remains the largest destination for capital, with a focus on AI technologies and broader tech adoption. Temasek’s recently opened Paris office will support investments across Europe, especially in sustainability and green transitions.
Methodology Enhancements and Challenges
Temasek refined its portfolio valuation methodology, incorporating market multiples of comparable public companies to align with industry practices. This approach values its portfolio at S$420 billion, compared to S$411 billion under the previous methodology.
Despite the improved results, challenges persist, including geopolitical tensions, sticky inflation, and economic uncertainties in Europe.
FTX and Technology Investments
Temasek remained tight-lipped about potential payouts from the collapsed cryptocurrency platform FTX, which it had previously written down to zero. It reaffirmed its commitment to investing in technology and innovation despite the incident, viewing tech as critical for understanding global trends and portfolio impacts.
Early-stage investments in innovation remain capped at 6% of the portfolio to mitigate risk, with a phased approach to scaling investments as businesses demonstrate traction.
Temasek’s forward-looking strategy, underpinned by diversification and targeted investments, positions it to navigate global uncertainties while driving sustainable growth.
