Asia weakness hits Temasek returns

The Singapore fund ramped up new investment but poor Asia results undermined performance

Singapore's Temasek said today that it made S$24 billion ($19.3 billion; €14.2 billion) of new investment in the year to March 2014, the most it has invested during a 12-month period since 2007.

In its annual review, the sovereign wealth fund said its net portfolio value was S$223 billion ($179 billion; €132 billion) at the end of the March, up from $215 billion a year earlier – a 3.7 percent increase.

However, Temasek also reported that its total shareholder return for the year was just 1.5 percent – well below the equivalent figure over the last five years (11 percent) and the last ten years (9 percent). This was “mainly due to weakness in our key markets in Asia”, it said. Singapore is its biggest market, accounting for about 31 percent of the portfolio by value, while China accounts for 25 percent, Australia 10 percent, and the rest of Asia a further 6 percent.

Temasek recently launched its second Astrea private equity fund of funds vehicle in partnership with six other institutional investors. It said the fund would help to “fine-tune” its thinking about the asset class, with a view to ultimately making private equity investment products available to retail investors.

Last month, Temasek also teamed up with Warburg Pincus to buy 50 percent of Santander’s custody business in Spain, Mexico and Brazil.