Temasek offloads $100m of Asia assets

The sovereign wealth fund has sold its interests in Mitsui Life and CEI to a private equity buyer

Listed private equity firm TIHT Investment Holdings has acquired S$129 million ($103 million; €79 million) worth of assets from Temasek Holdings, the S$223 billion Singaporean sovereign wealth fund, according to a statement.

The interests include a minority stake in each Japan’s Mitsui Life Insurance Company and SGX-listed CEI Contract Manufacturing.

The S$129 million will be payable partly in cash, and partly by way of financing and an issue of shares in TIHT. Post-transaction, a subsidiary of Temasek, Republic Technologies, will own 45 percent of TIHT.

“This acquisition is very much in line with TIHT’s new strategy to expand our business beyond private equity and venture capital investments. We are delighted about the confidence that is placed in us to help create value for all stakeholders. Through TIHT, we will work hard at enhancing capital return and value in order to deliver mutually rewarding returns to both parties,” Kin Chan, chairman at TIHT, said in a statement.

TIHT, a closed-ended fund set up in 1994, plans to expand its investment coverage to include special situation investment opportunities in listed and private companies. Typically, the firm is sector agnostic but has a strong focus on Asia Pacific and experience in cross-border investments.

Chan added, “We will broaden and deepen our strategic relationships with significant market players in the Greater China and Southeast Asia region in order to improve deal sourcing and asset management capabilities.”

Temasek declined to comment on why the firm divested the assets, but it has been active outside Asia recently, as poor returns from the region hit its performance numbers, the firm’s annual report showed this March.

Temasek reported that its total shareholder return for the year ending March 2014 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 at the time. 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.

In August, Temasek, Riverstone Holdings and Barclays Natural Resource Investments teamed up to back Origio Exploration, a Norwegian oil exploration and production business. The firm, with Warburg Pincus, also invested in Santander’s custody business in Spain, Mexico and Brazil, in June, as well as joining RRJ Capital to buy €1.3 billion in ING Group shares through its Europe and Japan unit NN Group in July.