Temasek Review 2019

Investment Update

We continually review and reshape our portfolio towards our assessment of longer term trends, even as we watch medium term risks.

During the financial year ended 31 March 2019, we invested S$24 billion and divested S$28 billion.

Investment Highlights

In terms of sectors, a key investment focus is technology companies that ride on the long term trends we have identified.

During the year, we invested in UST Global, a digital technology solutions company providing advanced computing and digital services. Other investments included OlaCabs, an online ride-hailing company in India; DoorDash, a North American online marketplace for restaurant food delivery and takeout services; Zilingo, an e-commerce fashion platform in Singapore; and Bionexo, a Brazilian healthcare e-commerce company.

We remain interested in non-bank financial services such as fintech and payment systems. Investments include Ant Financial that operates the flagship Alipay payments platform; Flywire, a global cross-border payments provider; Pine Labs, a provider of retail point-of-sale solutions; and Global Payments, a global payment technology and software solutions provider.

Our life sciences investments included Aerogen, an innovative global medical device and therapeutics company; Dr. Agarwal’s Healthcare, a private eye care chain in India; Hangzhou Tigermed, a clinical contract research organisation supporting the development of innovative drugs in China; Orchard Therapeutics, a commercial stage biopharma company and global leader in gene therapy for rare diseases; and Surgery Partners, an operator of surgical facilities and ancillary services in the US.

Geographically, other investments in the US included Farmer’s Business Network, an agriculture analytics platform for farmers; and Rent the Runway, an online e-commerce website for renting designer apparel and accessories.

Across the Atlantic, we invested in Safran, an aircraft engine equipment manufacturer based in France.

Our China investments included WeWork China, a co-working space provider; and Gracell Biotechnologies, a next-generation cell therapy company.

We stepped up
our divestment
pace based on
our global outlook.

We stepped up our divestment pace in cognisance of macroeconomic headwinds. Divestments included Gilead Sciences, Cargill Tropical Palm and Klabin. We continue to maintain significant holdings in Alibaba, CenturyLink and IHS Markit, even as we shed some stakes as part of our rebalancing. Post March 2019, we completed our divestment of Bank Danamon.

Southeast Asia is a growing area of interest in part from its expanding middle income population and thriving Internet economy. We remain invested in Indonesia, ranging from consumer and real estate, to emerging opportunities in technology and financial services.

Enabling Growth Capital

During the year, Heliconia Capital continued to work with its existing portfolio companies, helping them to build scale and establish their overseas presence. Heliconia, which was set up to grow small & medium enterprises in Singapore, also made several new investments. They include Nanofilm Technologies, a manufacturing services company with proprietary nano-coating technology used across various markets such as personal devices, consumer products and industrial segments.

As part of the International Partnership Fund, a co-investment fund set up to help Singapore enterprises internationalise their operations, Heliconia invested in one of the largest private specialised healthcare platforms in Vietnam, alongside one of its Singapore portfolio companies, Eagle Eye Centre.

Investing in Innovation

The game changers in the digital era are companies that harness technology to increase work efficiencies while meeting consumers’ needs in an affordable and convenient way. Artificial Intelligence (AI) solutions, in particular, have the potential to transform a wide range of industries.

During the year, we invested in several innovative early stage AI companies across the world. These included Eigen, an AI company targeting finance, law and professional services sectors; ThinCI, a semiconductor company that produces specialised chips to support AI applications; AirMap, an unmanned traffic management platform for drones; and Zipline, a commercial drone delivery company for medical products in developing countries.

We partnered the National Research Foundation in Singapore to commercialise intellectual property and create spinouts from publicly-funded research. Our joint venture company will invest from the seed and Series A stages through Series B and later rounds of these spinouts. During the year, we invested in Main Sequence Ventures, a platform built by the Australian Government’s science agency, CSIRO, to likewise commercialise innovation from its research ecosystem, including Australian universities.

We continued to invest in several Southeast Asian funds. These included Golden Gate Ventures, Jungle Ventures, Monk’s Hill, Openspace Ventures and Wavemaker Partners.

Transforming Enterprises

The game changers
in the digital era
are companies that
harness technology to increase efficiencies.

In September, we formed a new integrated pure-play cybersecurity platform, Ensign Infosecurity. Ensign brings together top cybersecurity resources to deliver end-to-end security solutions to enterprises and governments to help combat cyber threats, which have intensified as the world becomes more digitally connected.

In April this year, shareholders of CapitaLand approved the acquisition of Ascendas Pte Ltd and Singbridge Pte Ltd for the creation of the largest diversified real estate company in Asia, with combined total assets under management exceeding S$123 billion.

In April this year, shareholders of CapitaLand approved the acquisition of Ascendas Pte Ltd and Singbridge Pte Ltd for the creation of the largest diversified real estate company in Asia, with combined total assets under management exceeding S$123 billion.

Mainstreaming Sustainability

Climate change, resource scarcity and social inequality are among the sustainability issues that confront us globally. While these macro trends appear challenging, they also offer new opportunities to make a difference. Climate change, sustainability-related regulations, technological advances, and the rise of the “green“ and socially conscious consumer, have fostered the growth of new businesses and business models.

We work to understand these trends in order to position our portfolio for the future, and to seek new investible areas to capture sustainable value for Temasek and our portfolio companies.

As we continue to protect and enhance our portfolio, we have developed a framework for the integration of Environmental, Social and Governance (ESG) considerations in the Temasek investment process.

We have established and implemented a methodology customised to the specific characteristics of the Temasek portfolio, and examine ESG from a materiality perspective. This approach is designed to enhance existing investment practices, support our investment decision making, safeguard Temasek’s reputation, and create alignment with our purpose of generating commercial returns by investing with future generations in mind.