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Company SpecificsFounded: 1974
Headquarters: 60B Orchard Road #06-18, Tower 2, The Atrium@ Orchard, Singapore 238891
Ownership Structure: Fully owned by Singapore’s Minister for Finance (Incorporated) but operated as an autonomous and professional investment house guided by an independent board
Product/Service: Temasek manages a portfolio with a net value of about S$185 billion or US$134 billion, weighted towards Singapore and Asia. Temasek is an active shareholder and investor in diverse industries covering banking & financial services, real estate, transportation & logistics, infrastructure, telecommunications & media, bioscience & healthcare, education, consumer & lifestyle, energy & resources, engineering as well as technology.
Customers: Temasek’s only shareholder is the Minister for Finance (Incorporated).
HostsR. Shyamsunder: Managing Director, Investments
Ng Quek Peng: Managing Director, Portfolio Management
OverviewUpon arrival, our class was escorted to a large room for a presentation and Q&A session. Afterwards our hosts provided refreshments and mingled with us for about half an hour.
Among the managers we met were those involved in the recent Merrill Lynch activity. Within the last year, Temasek invested over $5 billion in Merrill Lynch at average price of about $23 per share. The investments were considered to be controversial and quite risky as Merrill Lynch’s stock value continued to drop. However, given the deal with Bank of America in September 2008 to acquire Merrill Lynch at $29 per share, Temasek possibly stands to profit.
Temasek insists that it does not have a political agenda
Because Temasek has close ties with the government, it has faced political reactions from neighboring countries in whose firms it has sought to invest. Foreign regimes suspect that Temasek is directly influenced by the Singapore government, which is perceived as a small but powerful state seeking to control strategic sectors of their economies. Our hosts addressed this by reiterating many statements found on the Temasek website and in press releases. While Temasek is state-owned, it is not state-directed. It funds new investments by selling assets (as opposed to being government-funded) and does not require the government’s approval for investment decisions. For these reasons our hosts do not consider Temasek to be a sovereign wealth fund.
Temasek is looking towards global expansion
Originally created to hold and manage investments and assets previously held by Singapore’s Minister for Finance (Incorporated), Temasek has since begun to diversify to other neighboring countries and beyond. Key offices are located in India, China, Vietnam, and Mexico, and a new Brazil office opened this year. Local relationships and industry expertise were emphasized as keys to success in these foreign offices.
Temasek employs an "active, but not activist" investment approach
Temasek considers its staff investment professionals and not management professionals. Temasek performs due diligence regarding the management teams of its portfolio companies. However, Temasek does not tell them how to run their businesses, even when it has dominant shareholder interest. Temasek may occasionally engage a board, but it will not dictate terms.
Temasek employs a young, international, and elite staff who embody a driven culture
Two-thirds of Temasek’s staff is below the age of 40. In 2008 34% of its employees were non-Singaporean, as opposed to only 1% in 2002. Today more than 40% of its senior management comes from outside Singapore. During our visit we met one manager from Russia and another from the US. Temasek also recruits from top business schools and promotes a meritocracy. The notion of just 350 employees managing US$134 billion is staggering. While our hosts admitted to some conflict between the “old guard” and the new, younger, multinational staff, they were also quick to praise the resulting synergy from the sharing of ideas. The self-described fast-paced environment was evident in the rapid rate of speech of the Temasek employees and the speed and efficiency with which they managed our group visit.
One interesting contrast was that the Temasek décor reflected a very contemporary style with a warm and inviting feel, surprising for a conservative financial institution. The space also contained a gym and a library. Given the Singaporean work-ethic and the age and qualifications of the staff, Temasek employees probably spend a significant amount of time at the office and so want it to feel like a “home”.
Posted by: L. Chun
We listened intently to the Temasek fund directors.
The Temasek directors fielded questions about their Merrill Lynch and other holdings.
The lobby led to a sleek and contemporary work space.