Temasek, one of the largest Asian investors and owned by the Singapore government, sees itself as a confirmed long-term investor without a predefined holding period and with full flexibility over asset allocation. 58% of fund assets are currently invested in shares in listed companies, with 42% invested in non-listed companies. “We are a reliable partner for medium-sized companies,” said Prof. Dr. Uwe Krüger, Co-Head of the Portfolio Management Group at Temasek, before adding: “As investors searching for alpha, we want to gain a detailed understanding of the companies we invest in, so we pursue a pure bottom-up approach.” This approach has paid off, with the fund achieving average returns of more than 15% p.a. over several years.
Temasek also regards itself as a pioneer of social and technological progress. Krüger explained that it is not always easy to make these decisions responsibly. For example, Temasek has scaled back lucrative investments in integrated oil and gas companies, instead choosing to focus on promoting CO2-neutral technologies and companies, even though this sector will only generate returns in the very long term. As a fund, Temasek will be CO2-neutral by 2020, and is striving to ensure that its investments halve their carbon footprint by 2030.
According to Krüger, the government does not have any influence over investment decisions. Nor is Temasek a pension fund – its mandate consists exclusively of increasing the asset base by making long-term equity investments in healthy growth stocks. Geographically speaking, the fund still primarily invests in Asia at present, particularly in China and Singapore. Although Europe has a 10% share of the asset allocation, this figure is rising fast. In the German-speaking DACH region alone, the fund focuses primarily on life science, agrochemical, industrial and B2C start-up companies.
With the economy and capital markets increasingly interconnected, Krüger observed that the interdependencies between politics and macroeconomics on the one hand and the performance of companies on the other have increased markedly. This has made investment decisions significantly more complex. As a result, Krüger explained that the fund currently holds “a significant amount of liquidity” in order to remain flexible at all times.