Temasek took a cautious approach and slowed its investment pace, with a net investment of $3 billion in the 12 months ending March 31.
Temasek Holdings Ltd, the Singapore-based public investment firm renowned for its strong investment portfolio and stable financial performance, announced a 5.07% decline in its one-year total shareholder return in Singapore dollars for the year ending March 31. reports, the company’s portfolio net worth also saw a decline, totaling S$382 billion ($284.77 billion) from S$403 billion a year earlier. This is the first annual negative return for Temasek shareholders since 2020.
This slowdown comes as no surprise, given the difficult macroeconomic and geopolitical environment that has impacted global markets. Lim Boon Heng, Chairman of Temasek, recently highlighted the challenging nature of global market conditions in 2022.
Last year, global equity markets grappled with the challenge of persistent inflation, despite central banks implementing multiple rate hikes. Heightened geopolitical tensions, such as those between the United States and China, as well as the Russian-Ukrainian conflict, added to market volatility and uncertainty.
In particular, the S&P500 (INDEXSP: .INX) and the benchmark MSCI Asia ex-Japan indices both fell around 20%. This slump reflects investors’ concerns about the impact of rising prices on corporate profitability and economic growth. Against this backdrop, Temasek’s declining annual shareholder return looks relatively favourable, demonstrating its ability to manage risk and mitigate losses.
The Singapore State Investment Arm maintains a diversified portfolio consisting of public and private market investments. As of March 31, unlisted assets accounted for 53% of its portfolio, generating higher returns than listed assets.
Bringing the unlisted portfolio to market would result in an estimated increase in value of S$18 billion. Additionally, Temasek has generated strong long-term returns, with three-year, ten-year and twenty-year total shareholder returns of 8%, 6% and 9% respectively.
Temasek’s conservative investment approach
Additionally, Temasek revealed a reversal in gains from its global direct investments in sectors such as technology, healthcare and payments, primarily due to depreciation in value in the higher interest rate environment.
Consequently, Temasek took a cautious approach and slowed down its pace of investment, with a net investment of $3 billion in the 12 months ending March 31. Temasek made strategic investments in payments platform Stripe and IT security provider Kaseya, facilitating the acquisition of Datto, a provider of security and cloud-based software solutions.
Additionally, Temasek has strengthened its investment in Mastronardi Produce Ltd., a Canadian company specializing in the cultivation and distribution of greenhouse-grown fresh produce. This move reflects Temasek’s confidence in the growth potential of the agriculture and food sector, driven by growing demand for high quality, sustainable products.
Additionally, Temasek has set a limit on seed investments, limiting them to 6% of its portfolio. This measure demonstrates the company’s reasonable risk management approach and recognition of the higher risks associated with start-ups.
In November, Temasek writing his $275 million investment in the bankrupt crypto exchange, FTX. Subsequently, the company implemented compensation cuts for the team responsible for recommending the investment and the management team.
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