Unlisted assets now make up more than half of total portfolio value
Temasek’s net portfolio value reached S$403 billion at the end of March 2022, exceeding the S$400 billion mark for the first time. This milestone reflects a S$22 billion increase from the previous year’s S$381 billion, driven by a 1-year total shareholder return (TSR) of 5.8%, lower than the previous year’s 24.5%.
Over the past decade, Temasek’s TSR has averaged 7% annually, with a 20-year TSR holding steady at 8%. TSR accounts for dividends paid to shareholders but excludes capital injections.
Shift Towards Unlisted Assets
For the first time, unlisted assets made up 52% of Temasek’s portfolio, valued at S$210 billion—four times higher than a decade ago. These assets have generated annual returns of over 10% over the past decade, benefiting from an illiquidity premium.
Key segments of the unlisted portfolio include Singapore companies like Mapletree, PSA, and SP Group, which collectively contribute a third of the unlisted assets and pay regular dividends. Additionally, nearly 40% of unlisted assets consist of investments in asset management firms such as Vertex and Seviora, alongside stakes in private equity and credit funds.
If marked to market, the unlisted portfolio’s value could rise by another 10%, according to Russell Tham, Temasek’s joint head of enterprise development.
Geographic and Sectoral Focus
Asia remains Temasek’s primary focus, with Singapore accounting for 27% of its portfolio, followed by China at 22%. Despite a decline in China’s share from previous years, it continues to be a key market, with high-performing investments in sectors like software, automation, and deep tech.
Sector-wise, financial services constitute 23% of the portfolio, while transportation and industrials grew to 22%, up from 19% the year before.
Investment Approach Amid Uncertainty
Temasek invested S$61 billion and divested S$37 billion in the past financial year, resulting in net investments of S$24 billion. However, the firm plans to adopt a cautious investment pace due to a fragile global economy and the likelihood of a recession in developed markets.
Rohit Sipahimalani, chief investment officer, highlighted Temasek’s commitment to long-term, risk-adjusted returns. He noted that while private markets have yet to correct to the same extent as public markets, Temasek would seize opportunities in both areas.
Supporting Local Companies
Temasek continues to support Singapore-based firms, including its participation in Singapore Airlines’ S$6.2 billion convertible bond issue and Sembcorp Marine’s S$1.5 billion rights issue. These efforts aim to strengthen balance sheets and accelerate transitions toward a green economy.
Despite challenges, Temasek remains focused on building a resilient portfolio aligned with structural trends and opportunities for sustainable growth.
