Singapore state investor Temasek Holdings’ divestments exceeded its investments for the first time since 2009, taking advantage of high valuations to sell of some assets while reducing acquisitions due to elevated prices, according to its annual report.
Temasek sold S$18 billion ($13 billion; €12 billion) of its assets over the past year, S$2 billion more than the S$16 billion it put to work, it said in its annual review released on Tuesday. The selling bolstered Temasek returns with the investor reporting a 13 percent return for the year, reversing the 2015’s return of negative 9 percent.
Temasek chairman Lim Boon Heng said the firm’s divestments are driven by its cautious global outlook and tempered by geopolitical risks across the world and high valuations in key markets such as China and the US.
“We have continued to rebalance our holdings towards longer term macro opportunities such as the transforming economies, as well as emerging new trends such as the digital enablers for new businesses,” commented Lim. “While the global recovery is gaining momentum, there are still uncertainties, both in the medium as well as longer term.”
It was the first net divestment year for the firm since fiscal 2009, however in 2015 Temasek divested a record S$28 billion but it remained a net buyer investing S$30 billion.
Its key divestments for the year include in Connecticut-based financial services company Synchrony Financial, Indian telco Bharti Airtel and Swiss building materials manufacturer LafargeHolcim. Temasek also partially exited holdings in Alibaba and China Construction Bank.
The investor has a net portfolio value of S$275 billion as at 31 March, up from S$242 billion a year earlier.
Temasek’s new investments are funded primarily by divestment proceeds, dividends from our portfolio companies, and distribution from funds. Telecommunications, media & technology, transportation & industrials, and life sciences & agribusiness were the its main sectors of investment. Singapore and China take the largest slice of its allocations, followed by North America, Australia and New Zealand, and Europe.
Among its private equity investments last year include a €94 million stake in French investment firm Tikehau Capital Partners, luxury coat maker Moncler, and Chinese online travel platform Ctrip. The firm also teamed up with KKR in December to acquire a minority stake in Indian insurer SBI Life Insurance for $264 million.