Temasek, Singapore's sovereign wealth fund, reported a 1.5% gain on its investment portfolio for the fiscal year ended March 31, reflecting heavy exposure to listed equity markets in Asia that declined during the year.
The roughly S$3 billion (US$2.4 billion) gain, combined with the injection of an additional S$5 billion from the government, lifted Temasek's portfolio to S$223 billion, up from S$215 billion the year before.
While the latest year's results fell short of the fund's roughly 8% cost of capital, Temasek executives, at a briefing Tuesday, said such short-term pain could set the stage for longer-term gains.
There was a “significant step-up” in Temasek's net investments to S$14 billion, the most since the global financial crisis, reflecting exciting opportunities now, said Rohit Sipahimalani, co-head of Temasek's investment group and head of India.
The geographic dispersion of those investments, meanwhile, included a relatively high weighting, at 40%, to companies in the U.S. and Europe, helping lift their share of Temasek's portfolio to 14% from 12% the year before.
Executives declined to say investments in U.S. companies during the latest fiscal year — including almost US$1 billion in biopharmaceutical company Gilead Sciences and US$500 million in laboratory equipment maker Thermo Fisher Scientific — were aimed at diversifying a traditionally Asia-focused portfolio.
Still, with the opening of offices in London and New York during the year, executives said Temasek will be better placed to find interesting opportunities in those markets.
If Asia attracted a smaller majority of Temasek's latest investments, executives said Tuesday the fund remains anchored on that fast-growing region, which accounts for 72% of its portfolio: 31% in Singapore, 25% in China and 16% in the rest of Asia, ex-Australia and New Zealand.
China accounted for the largest portion of the 50% of Temasek's net new investments for the year that went to Asia.
At the briefing, Wu Yibing, who joined Temasek in 2013 as head of China, said while the country's growth is slowing, he doesn't see much risk of a hard landing. Its growth shouldn't slip below 7%, Mr. Wu added.
Temasek's latest results faced headwinds due to markets such as Singapore's Straits Times index and Hong Kong's Hang Seng index closing down for the year ended March 31, but that kind of weakness is providing “opportunities for us to invest,” Mr. Wu said.