How Temasek’s portfolio is changing complexion in five charts

 How Temasek’s portfolio is changing complexion in five charts

Singapore state investment firm Temasek’s portfolio value in the year through March 2021 shot up at the fastest pace in a decade, as it more than matched its record divestments with new investments.

The Capital Quest looked at five data points and presented those in interactive charts in an effort to take a deep dive into how Temasek is changing colours, not just in terms of its own size but also shifting its geographical profile, sectoral exposure and asset class.

Temasek has had a distinct shift towards the developed economies in the west over the last six years and the year ended March 31, 2021 was no different.

While its overall exposure to developed economies has stayed around 60% of the total for several years now, what’s striking is the shift towards the Americas and EMEA (Europe, Middle East and Africa) as it has rejigged the portfolio away from its home country as also from Australia and New Zealand.

While the firm doesn’t give minute details of the regions, much of its exposure in the Americas and EMEA is in North America and Europe.

Temasek’s asset class type shows the duality of its strategy. It has made a significant push towards private equity-style investments, which represent investments in unlisted assets characterised by low liquidity.

However, the firm has also balanced the PE-style bets with higher liquid assets. Liquid assets represent both cash and cash equivalent as also minority stakes in listed companies that are relatively easier to divest.

That said, it did reduce its exposure to unlisted assets last year.

The sectoral play has seen Temasek reduce its exposure to telecom, media and technology as a space while putting more money in the life sciences and food and agriculture companies over the years.

Last year, it also marked a distinct shift outside the consumer and real estate sectors while once again betting more on life sciences and food sector.

Overall, Temasek reported record investments and also record exits last year. Its gross deployments shot up over 50% to S$49 billion last year but so did divestments, which rose to S$39 billion.

Net investments at S$10 billion were just second to the S$13 billion it pumped in four years ago.

Temasek’s total portfolio value shot up by a fourth to hit an all-time high last year.

This was also one of the fastest pace at which its overall portfolio value increased in a year, barring 2009-10 when its portfolio value rose even sharply by 43% when it bounced back after the global financial crisis of 2008-09.

Vivek Sinha

The Capital Quest