Temasek Review 2019

How We Invest

We are an active investor and owner, focused on delivering sustainable value over the long term, to ultimately achieve a better world for this and future generations.

Since our inception, we have evolved from a Singapore investor to a global investor. Our investment philosophy has been underpinned over the last 17 years, by four basic investment themes:

  • Transforming Economies
  • Growing Middle Income Populations
  • Deepening Comparative Advantages
  • Emerging Champions

These themes give rise to six structural trends, which define the direction of our investments:

Better Smarter Sustainable
Better Smarter Sustainable

We focus on structural trends driven by transformational technologies, sustainable living, longer lifespans, and changing consumer patterns, as incomes grow and lives are uplifted.

Social Progress

Longer Lifespan

Meeting the growing needs
of longevity

Rising Affluence

Satisfying aspirations of rising affluence with technology enabled opportunities

Sustainable Living

Creating eco-conscious solutions for
our future generations

Technology Enablers

More Connected World

Enabling faster and better ways to stay connected in a digital era

Sharing resources more efficiently
and conveniently

Smarter Systems

Breaking new ground through artificial intelligence and robotics

We seek out companies that harness technological advancements to meet the needs of demographic shifts and other changing consumption patterns. Innovative companies may rapidly disrupt old business models, or create new consumption demand. We expect to reshape our portfolio increasingly in line with these trends.

Our investment discipline focuses on intrinsic value and our risk-return framework. We are driven by bottom-up intrinsic value tests for each opportunity, with returns tracked against a risk-adjusted cost of capital. This risk-return framework drives our investment discipline, capital allocation, performance measurement and incentive system.

We have full flexibility as an owner and investor to reshape and rebalance our portfolio, whenever opportunities or challenges arise. We are mostly invested in equities, and based on our risk-return appetite, we invest or divest in line with our outlook and value tests. We may take concentrated positions or remain in cash, and do not set limits for asset classes, countries or sectors. We manage our liquidity and balance sheet for resilience.

Our investment
discipline focuses
on intrinsic value and our risk-return framework.

We are an active shareholder, seeking to add or create value in our portfolio across all stages of enterprise growth, from early stage to mature companies. We share our perspectives on global or strategic trends frequently with partners, and the boards and management of our portfolio companies. We proactively promote good governance, looking to boards to drive strategy and oversee management, who, in turn, run their respective companies.

Our portfolio comprises both listed and unlisted assets, with the latter consisting of companies and funds. Our unlisted blue chip companies, such as PSA and Mapletree, and our portfolio of high quality funds pay steady dividends and distributions. Our investments in funds have been instrumental in helping us gain deeper insights into new markets and have provided co-investment opportunities. Meanwhile, our selective investments in early stage companies provide us with insights into innovation, enabling us to better assess future opportunities and understand potential implications for our broader portfolio, in addition to delivering returns.

We manage our
liquidity and balance
sheet for resilience.

From time to time, we may express our interest to invest or divest selected positions or manage our portfolio through options and warrants. We may also use derivatives to hedge currency and/or protect against potential losses of our underlying investments, where gains and losses of the derivatives are matched against corresponding losses and gains in the underlying investments.

Delivering Sustainable Returns over the Long Term