Is Temasek Holdings Everywhere?

 

Many of us have definitely heard of Temasek Holdings, but do we actually know what Temasek Holdings really is?

 

Firstly, Who Is Temasek?

Temasek is an investment company based in Singapore that is wholly owned by the Singapore Minister for Finance (A body corporate). Temasek owns and manages its assets on a commercial basis – like any other private company.

As at 31 March 2014, Temasek’s portfolio totaled S$223 billion (With a capital B). 2014 marked Temasek’s 40^th anniversary and since their inception in 1974, they have a compounded annualized Total Shareholder Return of 16% in SGD terms. Not too shabby at all!

 

 

However total shareholder returns over the more recent years were not as high on an annualised rate. This might be due to their size, with a larger portfolio; one requires a much more significant gain to really move the needle. For example for a $50 million portfolio, a $10 million gain is 20%. Whereas for a $1 billion portfolio, even a $50 million gain is just 5%! And it gets much harder to find opportunities with such a large portfolio.

 

Where Do They Invest In?

 

 

It shouldn’t come as a surprise that being based in Singapore, a total of 72% of their portfolio originated from Asia. Singapore took the bulk of it with 31% of their entire portfolio, that’s close to S$70 billion (US$55 billion)!

That was approximately 18% of Singapore’s 2013 GDP of US$298 billion.

 

What Assets Made Up Their Portfolio?

 

 

Financial services (Banks), Telecommunications, Media & Technology and Transportation & Industrials took up the top three spots in their portfolio.

 

Value In Action

Portfolio returns should be viewed from a long term perspective, even if Temasek only increased total shareholder return by 1.5%, their 40 year record of 16% per year was impeccable – This meant doubling every 5 years!

Today we have provided you with an introduction to what Temasek is and what Assets it has in its portfolio. In our next part, we would explore in detail some of their Singapore publicly listed entities within their portfolio!

Stay tuned 🙂

If you were wondering about where to get all of this data from, its readily available from Temasek’s website right here!

 

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All views and opinions articulated in the article were expressed in Mun Hong’s personal capacity and do not in any way represent those of his employer and other related entities. Mun Hong does not own any shares in the companies mentioned above.

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