Singapore state investment arm Temasek Holdings reported a gain of 24.5%, or S$75 billion ($56 billion), for its fiscal year ended March 31, boosting the value of its portfolio to a record S$381 billion.
And despite unprecedented pandemic-related travel constraints for the 12-month period, Temasek officials reported combined investments and divestments of S$88 billion — S$30 billion more than the year before.
For the latest year, "we have invested S$49 billion and divested S$39 billion – both are records for us," said Nagi Hamiyeh, joint head of Temasek's investment group and head of portfolio development with Temasek International, in a fiscal year briefing Tuesday.
The lesson is "if you start on a journey much earlier on and you nurture relationships with key companies that you'd like to invest in — and that generally takes more than a year or two to build the relationship and the rapport — we can very well in a scenario like the one we had this year, being working from home, be able to conduct proper due diligence and close on these," Mr. Hamiyeh said.
Temasek's broad geographic footprint contributed to that ability to get things done last year, with 76% of the group's portfolio invested outside of Singapore. During the year, Temasek opened two new offices in Brussels and Shenzhen, bringing its total number of worldwide offices to 13.
Meanwhile, Mr. Hamiyeh said, "we have embarked on rebalancing the portfolio" to emphasize four key areas: digitization, sustainable living, the future of consumption and longer lifespans.
On the surface, the broad breakdown of Temasek's allocations to global economic sectors appeared fairly steady, but officials said that masks significant changes taking place within those segments.
For example, the weight of financial services in the portfolio edged up to 24% by March from 23% the year before, while allocations to telecommunications, media and technology companies held steady at 21%.
But in contrast to earlier years when banks dominated financial services allocations, roughly half of the group's exposures there now are in insurance, fintech and payments companies. Similarly, technology companies are a big chunk of the group's exposures in the technology, media and telecom sector, which was previously dominated by telecommunication companies.
By geography, China remained the portfolio's biggest target for allocations, even as the country's weighting slipped to 27% from 29% the year before. For the sixth year in a row, the Americas garnered the biggest flows, with allocations to that region climbing to 20% from 18%.
Temasek officials said the decline for China reflected the fact that that country's economy had already begun to rebound from the pandemic downturn by the March 2020 close of the prior fiscal year so the latest gains for the Americas was more a matter of the U.S. economy narrowing that recovery gap with China over the latest year.
Meanwhile, officials said they continue to follow regulatory moves in China with interest but their views on the attractiveness of mainland opportunities haven't been dented by recent high-profile crackdowns by regulators there on companies Temasek has exposure to, such as Alibaba Group and Didi Chuxing Technology Co.
A Temasek news release said the group will increasingly focus on climate change and investing in companies that can offer solutions. "The window is closing rapidly on the carbon abatement front. We are nearing the tipping point for melting ice sheets and other climate regulating systems, resulting in more extreme weather events," the news release said, adding, "Temasek will work to catalyse solutions ... as an investor, institution and steward."