GIC, Temasek & MAS 01 (May 08 - Aug 09)

[iam802]

maybe one invest in bond and property...

the other invest in equities, and other higher risk stuffs.

[winston]

Maybe Temasek has been investing a lot in Private Equities and IPOs.

[millionairemind]

Certainly hope they know what they are doing

Published December 24, 2008

GIC RE in US$1.3b purchase of property fund stakes

GIC Real Estate (GIC RE) has bought all of US-based ProLogis's property fund interests in Japan and China for US$1.3 billion.

ProLogis, said to be the world's largest owner, manager and developer of distribution facilities, has a China Properties Fund and two Japanese funds, according to its website.

GIC RE said yesterday that it would manage the new portfolio through a 50-50 joint venture formed with former ProLogis chairman and chief executive Jeffrey Schwartz, as well as 'managers involved in the management of the properties both in China and Japan'.

Mr Schwartz, who had resigned last month without citing a reason, according to an Associated Press report, was appointed chairman of the joint venture.

He said that the logistics property businesses in Japan and China have 'very good long-term prospects despite the current global economic climate'. 'Our immediate priority is to ensure that the individual assets in Japan and China continue to be well managed.'

GIC RE president Seek Ngee Huat said: 'The acquisition consolidates control over our existing portfolio in Japan and provides a platform to expand our logistics property business in China.'

The transaction is due to be completed in January next year.

[iam802]

I read about Prologis while I was in Japan recently and have them on my watchlist.

IIRC, they have the largest distribution space worldwide; ahead of their competitor by quite a fair margin.

One thing to note is these guys are considered late-comers to this space. However, they have somehow manage to leapfrog competitors within a 'short span' of time.

Value investors may want to dig into their financial statements.

[winston]

Recession-hit Singapore could tap SWFs: newspaper

Singapore's sovereign wealth funds, which have helped bail out troubled global financial institutions, could for the first time be tapped to help the ailing domestic economy, a report said Monday. The city-state's leaders are considering the unprecedented step of drawing on its reserves to fund aggressive measures needed to fight an economic downturn, Senior Minister Goh Chok Tong was quoted as saying in The Straits Times.

Goh, a former prime minister, said the reserves were for a rainy day, and now the weather has turned bad. "If this is not a rainy day, I don't know what is a rainy day," Goh was quoted as saying ahead of the government's budget statement on Thursday. The reserves include assets managed by the Government of Singapore Investment Corp (GIC) and Temasek Holdings, the newspaper said. GIC and Temasek are both sovereign wealth funds -- a form of government-created investment vehicle that has emerged as a potent force on global financial markets.

Late last year and early this year GIC injected billions of dollars into Swiss bank UBS as well as US banking giant Citigroup. Temasek pumped billions into the former US investment bank Merrill Lynch. All three financial institutions suffered massive losses from US subprime, or higher-risk, mortgage investments. The US mortgage crisis evolved into a global economic slowdown which, late last year, made Singapore the first Asian economy to enter recession. A 2007 report by Citigroup Global Markets listed both Temasek and GIC as among the largest sovereign wealth funds in the world.

GIC in September said its nominal rate of return over the past 20 years was 7.8 percent in US dollar terms. It said it managed well over 100 billion US dollars in investments. Temasek, which has stakes in well-known regional firms including Singapore Airlines, in August reported a record annual profit of 18.2 billion Singapore dollars (12.25 billion US). The country's official foreign reserves were 234.5 billion dollars in 2007.

[millionairemind]

If one has a 300B portfolio and lost 40% compared to MSCI's 42%... one had just lost a staggering $120B

January 19, 2009, 5.13 pm (Singapore time)

Temasek, GIC outperformed equity mkts: Tharman

SINGAPORE - Singapore's sovereign wealth funds, the Government of Singapore Investment Corp and Temasek Holdings, outperformed global equity markets in 2008, the city-state's finance minister said on Monday.

'Their overall value has fallen by less than the decline in global equity markets, as they maintain diversified portfolios and had taken precautionary actions early in the crisis to reduce their exposures to the equity markets,' Tharman Shanmugaratnam said in a reply to a parliamentary question, referring to a 42 per cent fall in 2008 in the MSCI World equities index. -- REUTERS

[winston]

If GIC and Temasek are 100% invested in global equities, then comparing their performance with the MSCI World Equities Index is correct.

If they are not 100% invested in global equities, then maybe the benchmark should be how much they are getting above the risk free rate of return..

[winston]

Have you are learn anything from the Business Leaders and Politicians currently at Davos ? I've been catching them on and off on CNBC, CNN & E-mail alerts and I've not heard anything that I've not heard before ...

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Singapore Says Wealth Funds May Play Bigger Role in Markets By David Yong

Jan. 31 (Bloomberg) -- Institutional investors, including sovereign wealth funds, may play a bigger role in stabilizing the global financial system as leveraged banks and hedge funds stumble, the Government of Singapore Investment Corp. said.

“With many key debt and equity real estate markets pushed to extreme under-valuations, institutional investors like pension funds and SWFs will play an important role in the stabilization and eventual recovery of asset markets,” said Tony Tan, deputy chairman and executive director of GIC. “Real money investors, particularly un-leveraged global institutional investors, would become relatively more important players” in bank recapitalization efforts, he said.

Tan made the comments in a speech at the World Economic Forum in Davos, Switzerland yesterday. A copy of the speech was made available in Singapore. GIC manages more than $100 billion of the city-state foreign-exchange reserves.

Global financial institutions have written down $1.06 trillion in assets and credit losses after the collapse of the U.S. subprime mortgage market and Lehman Brothers Holdings Inc., according to data compiled by Bloomberg News. Hedge funds’ assets slumped 48 percent to $988.4 billion in 2008 because of investment losses and client withdrawals, according to TrimTabs Investment Research and BarclayHedge.

“Leveraged financial institutions have been significantly damaged by the disruptions in funding markets and the bursting of the housing bubble,” Tan said in the speech. “Similarly, hedge funds and private equity players will find their activity and growth more constrained.”

UBS, Citigroup

Investors, including SWFs, with their long-term investment horizons, could be important sources of demand for undervalued assets, thus steadying financial and household sector losses and restoring credit creation and demand in the economy, he said.

“Given their large asset size, SWFs would have to step up to the plate in the global financial restructuring, ” said Song Seng Wun, a Singapore-based regional economist at CIMB GK Securities Ltd. “It’s a positive for their bargaining power. The downside is that we don’t know how long or how deep this situation will be.”

Singapore’s state-owned GIC and Temasek Holdings Pte, each managing more than $100 billion, have invested about $24 billion in the recapitalization of UBS AG, Citigroup Inc. and Merrill Lynch & Co. in the past 14 months even as the finance ministry said this week the worst of the credit crunch is yet to come.

( Do you see the Diversification ? They are all in the Financial Industry )

Capital Injections

Governments in the U.S., U.K. and across Europe have injected capital into their banks to ensure that lending to companies and consumers doesn’t freeze up. European Union regulators this week approved France’s proposal to increase its funding for recapitalization of banks to 11 billion euros ($14.1 billion). Ireland last month said it would inject 2 billion euros in Allied Irish and Bank of Ireland.

As governments and central banks end up taking over or buying up large swathes of assets from distressed owners, GIC’s Tan said the markets risk being saddled with over-regulation that stifles efficiency and discipline.

“As the financial system and economy stabilize, governments will have to eventually divest their asset holdings,” he said. “It’s in the interest of governments to retain the confidence of investors by keeping their economies and markets open, competitive and attractive to private investors.”

[winston]

Hmmm... I would not be sleeping at all if I've only 7% cash ...

Singapore GIC says it is underweight stocks, has cash

SINGAPORE, Feb 2 (Reuters) - The Government of Singapore Investment Corp (GIC), the country's largest wealth fund, has reduced its exposure to stocks since mid-2007 and now holds more than 7 percent of its portfolio in cash, the Straits Times newspaper reported on Monday.

GIC, which has an estimated $300 billion in assets, is currently "underweighted in equities, overweighted in cash and cash equivalents," Deputy Chairman and Executive Director Tony Tan told the paper in an interview.

The fund's cash reserves had risen to above 7 percent of its portfolio in the second half of last year, he added, indicating GIC has slightly increased its cash holdings since March 2008.

GIC said in September it held 7 percent of its portfolio in cash and another 26 percent in fixed income when it made public its annual report for the 12 months to March 31. [ID:nSIN260248] That was after the fund bought nearly $18 billion worth of convertible notes in Citigroup and UBS in late 2007 and early 2008 to help recapitalise the two banks.

Tan said the current global economic downturn will last for some time and he did not expect GIC, or any large investor, to reproduce the fund's annual average real return of 4.5 percent average in the past 20 years in Singapore dollar terms.

In a speech made at Davos on Friday, Tan said "unleveraged global investors" such as sovereign wealth funds will pay a more important role in future as hedge funds and private equity find their activities constrained by tighter borrowing restrictions.

Western governments, which have taken large stakes in banks to prop up their financial systems, will eventually have to "re-privatise" assets on a massive scale and will need to attract long-term institutional investors like sovereign funds when markets stabilise, he said.

[winston]

GIC's average return 5.8% over 20 yrs By LYNETTE KHOO

SINGAPORE - The Government of Singapore Investment Corporation (GIC) had achieved an average rate of return of 5.8 per cent in its portfolio over the past 20 years to March 2008 in Singapore dollar terms. This was 4.5 per cent above global inflation.

More data could be found in GIC's report published in September 2008.

'GIC has performed well over the long term, in accordance with its mandate. In the current financial meltdown, GIC investments have lost its value just like any other institutional investors,' said Minister of State for Finance and Transport Lim Hwee Hua at Parliament on Wednesday.

'The overall value however, has fallen much less than global equity markets of 42 per cent for 2008, mitigated by GIC's decision early in the crisis to reduce its equities market exposure and its portfolio diversification strategy.'

( Why is GIC comparing itself to a Global Equity index ? Is GIC a 100% Global Equity Portfolio ? )

She noted that GIC's long-term approach in investment management has enabled it to ride through the cycles including the current downcycle. It thus is inappropriate to compare GIC's investment performance with other institutional investors as their time horizon and investment objectives differ.

GIC has since diversified its portfolio from fixed income instruments to higher risks but higher returns investments such as equities and alternative investments, as its asset size grows.

Mrs Lim added that GIC's approach to seek reasonable returns above inflation has helped Singapore grow its reserves that provides an important cushion for economic downturns and contribute to the government's budgetory needs.