Singapore’s Temasek doubles down on AI and private credit

{"text":[[{"start":7.4,"text":"Temasek has set out plans to nearly triple its exposure to AI companies and double its private credit holdings over the next five years, as Singapore’s state investor focuses on accelerating returns after several lacklustre years."}],[{"start":21.3,"text":"The investment group with S$518bn (US$401bn) under management notched up total shareholder returns of 10.5 per cent in the year to the end of March, down from 11.8 per cent the year before."}],[{"start":36.35,"text":"Yet over five years, it has averaged annual returns of 4.6 per cent, compared with 13 per cent for the MSCI World global stocks benchmark, having been hit by a market downturn in China."}],[{"start":49.55,"text":"In a bid to turbocharge growth, Temasek announced plans on Wednesday to increase its exposure to AI companies from 6 per cent of its total portfolio to 15 per cent by 2031."}],[{"start":61,"text":"“AI is integral to how we sense emerging opportunities, adapt our portfolio and thrive as an institution,” said Dilhan Pillay, Temasek’s chief executive."}],[{"start":null,"text":"

"}],[{"start":71.5,"text":"The state investor said its AI investments would be focused on five areas: energy and data centres, semiconductors, cloud service providers, AI model developers such as OpenAI and Anthropic, and apps and software infrastructure."}],[{"start":87.45,"text":"It added that new investments would be made primarily through buying public rather than private equities. As its AI investments increased, the share of other technology and telecommunications companies in the portfolio would fall, it said."}],[{"start":102.95,"text":"Temasek’s biggest portfolio companies include Nvidia, Amazon, Tencent and Alibaba. This year, it participated in OpenAI’s $122bn capital increase and Anthropic’s $65bn funding round. Both companies are on course for blockbuster listings."}],[{"start":121.9,"text":"Rohit Sipahimalani, Temasek’s chief investment officer, said holding listed shares of AI companies would allow the state investor to deal with high valuations better."}],[{"start":132.4,"text":"“If there are periods where we see valuations getting very stretched, we have the flexibility [with] the liquid portion — which is a large part of our AI exposure — to trim our exposure in those areas and then reallocate to other areas,” he said."}],[{"start":null,"text":""}],[{"start":146.85,"text":"Temasek also outlined plans to increase its exposure to private credit from 2 per cent of its total portfolio to 5 per cent by 2031."}],[{"start":157.04999999999998,"text":"The commitment comes as other large investors are ploughing into the asset class following an exodus of smaller retail clients concerned by several high-profile corporate collapses."}],[{"start":167.04999999999998,"text":"Temasek said it continued to believe private credit could generate equity-like returns with a lower risk than private equity."}],[{"start":174.7,"text":"“Across the board, we are still seeing reasonably good opportunities in the market,” said Alpin Mehta, head of private equity capital solutions at Temasek’s partnerships business."}],[{"start":186.1,"text":"Temasek was set up in 1974 to manage the Singaporean government’s stakes in large domestic companies after they were privatised. In recent decades, it has increased its investment overseas. "}],[{"start":197.79999999999998,"text":"Together with Singapore’s larger sovereign wealth fund GIC and the central bank, they account for about a fifth of the city-state’s budget, allowing the country to run a surplus for much of the past two decades."}],[{"start":210.49999999999997,"text":"In April, it underwent its biggest restructuring since 2011 to focus on improving returns."}],[{"start":217.39999999999998,"text":"Under the new structure, the group was split into three segments: domestic companies, which account for 43 per cent of the portfolio; global investments, which make up 38 per cent; and partnerships and fund companies, which comprise 19 per cent."}],[{"start":232.45,"text":"Over the past 10 years — during which time its assets have doubled — Temasek averaged an annual return of 7.1 per cent, compared with MSCI World’s 12.6 per cent. Over 20 years, it has yielded 6.8 per cent annually, compared with MSCI World’s 9.3 per cent."}],[{"start":258.59999999999997,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1783505877_4028.mp3"}