Sovereign Wealth Fund Institute

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According to Reuters, “Singapore’s biggest sovereign wealth fund GIC has chosen UBS, China International Capital Corp (CICC) and Singapore’s DBS as joint bookrunners for its upcoming logistics unit IPO, two sources familiar with the deal said.

The initial public offering is likely to raise $2-$3 billion, much higher than earlier estimated, said the sources who declined to be named because the deal has not been made public yet.

These banks will join JPMorgan and Citigroup, which were first chosen as joint global coordinators, they said.

UBS and DBS declined to comment and CICC was not immediately available for comment. GIC also declined to comment.”

Source: Reuters

Tony Tan

According to Bloomberg, “The global rebound is “fragile” and shocks could push the world toward another recession, according to Government of Singapore Investment Corp., manager of more than $100 billion of the nation’s foreign reserves.

Risks to the global recovery have increased due to Europe’s debt turmoil, continued deleveraging in the U.S. and protectionist pressures, Tony Tan, deputy chairman of GIC, said in a speech in Singapore today. The fund is ranked the world’s sixth-largest state investment company by Sovereign Wealth Fund Institute in California.

“The economic recovery, while real, is fragile and there is a risk that negative shocks could push the global economy towards a recession sooner than expected,” Tan said. “The strong rebound in global industrial production is peaking while monetary and fiscal policies, particularly in the larger emerging economies, are being normalized.””

Read more: Bloomberg

According to the press release, “Temasek Holdings (Private) Limited (Temasek) today released its annual performance report and institutional review, Temasek Report 2010 – Making a Difference, for financial year ended 31 March 2010. Temasek Report 2010 sets out highlights of the firm’s portfolio returns and investments, its consolidated group financial summary and institutional framework as well as its engagement with stakeholders, including the wider community.

Delivering Long Term Returns

The market value of Temasek’s portfolio as at 31 March 2010 rebounded to a new financial year-end high of S$186 billion. This is an increase of S$56 billion from a year earlier, with a Total Shareholder Return of over 42% for the year.

The book value of the Temasek portfolio increased to S$150 billion, up from S$50 billion 10 years ago, underpinned by the secular growth of its portfolio companies and Temasek’s own investment activities.

Total Shareholder Return (TSR), measuring returns on an annually compounded basis since inception, was 17% by market value, and 16% by shareholder funds. Both 20-year and 30-year TSRs held steady at a creditable 16% by market value and 14% by shareholder funds.

Medium-term five-year TSR was relatively robust at 11% by market value and 14% by shareholder funds, while 10-year TSR compounded annually from the peak of the dotcom bubble, was 6% by market value and 12% by shareholder funds.

Also known as Wealth Added or Economic Profit, total portfolio returns to the shareholder, net of a risk-adjusted hurdle, was S$42 billion for the year, while group net profit was S$5 billion, with lower profit contributions from some of the portfolio companies which were impacted by the global financial crisis.

Temasek closed the financial year on 31 March 2010 with a comfortable net cash position.

Mr S Dhanabalan, Chairman of Temasek Holdings said, “Since inception, Temasek has been committed to create and deliver sustainable value as an active investor and shareholder of successful enterprises.”

“Our portfolio has delivered consistently through market cycles. Long-term TSR by market value held steady at 17% since inception, while both 20- and 30-year TSRs were 16%.””

Read more: Temasek Press Release

According to the press release, “Norwegian finance minister Sigbjørn Johnsen and Norges Bank’s governor Svein Gjedrem were in attendance on Wednesday when Norges Bank Investment Management (NBIM), manager of the Government Pension Fund Global, opened a new office in Singapore. The office will help NBIM’s existing office in Shanghai to cover the increasingly important Asia region.

Various representatives of the Singapore authorities and local business community, including trade and industry minister Lim Hng Kiang, were also at the opening ceremony.

“An office in Singapore will strengthen our operations in Asia,” commented Gjedrem. “Having a presence in a region with strong economic growth is important for achieving good management results.”

As one of Asia’s foremost financial centres, Singapore offers good investment opportunities and has a well-developed financial infrastructure. Asset management is a major industry in the country, making it possible for NBIM to recruit and retain skilled workers.

“The new office will be a good supplement to the Shanghai office opened in 2007,” commented NBIM’s CEO Yngve Slyngstad.

Sigmund Kyrdalen has been appointed general manager in Singapore. He is a senior portfolio manager at NBIM and managed NBIM’s London office for two years.  The Government Pension Fund Global had a market value of almost 2 800 billion kroner at the end of June. Around 10 percent of the fund is invested in Asia, and around 15 percent of its equity investments are in Asian companies.

Besides Singapore, NBIM has offices in Oslo, London, New York and Shanghai.”

Press Release: NBIM

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According to Reuters, “The Government of Singapore Investment Corp (GIC) is exploring the possible listing of its logistics business in Singapore in an IPO valued at between $500 million to $1 billion, sources with knowledge of the deal told Reuters. The business is part of GIC Real Estate or GIC RE which is ranked amongst the world’s top 10 real estate investment firms. GIC, Singapore’s biggest sovereign wealth fund, declined comment.

“The proposal was to list their logistics business,” said a source who is aware of GIC’s plan. “They could do an industrial REIT (real estate investment trust).”

GIC RE manages a multi-billion U.S. dollar global portfolio of property assets, with over 200 investments in more than 30 countries.

JPMorgan and Citigroup are among the banks leading the talks for the mandate, one of the sources told Reuters.”

Source: Reuters

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GIC, a sovereign wealth fund of Singapore, said Tuesday that its investments fell more than 20 percent in the year that ended in March, but recovered more than half that loss during the rally on financial markets since then.G.L.C., or the Government of Singapore Investment Corp., the larger of the city-state’s two wealth funds, said it had increased exposure to alternative investments like real estate and natural resources but was bearish on bonds. The fund said its managers were optimistic about emerging markets and Asia.

The fund’s portfolio shrank by more than a fifth in the year that ended March 31, but it has ridden the financial meltdown better than its sister fund Temasek by paring its exposure to equities before the crisis and through a well-timed sale of part of its Citigroup holding. G.I.C., headed by Lee Kuan Yew, the former prime minister, is the largest sovereign fund in the world after those of Abu Dhabi, Saudi Arabia and Norway, according to Deutsche Bank. The fund says it manages more than $100 billion; analysts estimate the figure at $200 billion to $300 billion.

read more: The New York Times

Reuters reports, “The chairman of the Government of Singapore Investment Corp (GIC), the city-state’s biggest sovereign wealth fund, said on Monday the fund will be cautious and take few risks. His comments came after the country’s other sovereign fund Temasek saw big losses on its investments in Western banks.

‘GIC will be cautious, low risk,’ said Lee Kuan Yew in a discussion at an aviation meeting in Malaysia.

Temasek’s new American chief Chip Goodyear would, however, “seize opportunities”, said Lee, Singapore’s former prime minister and the father of current prime minister Lee Hsien Loong. “

read more: Reuters

Reuters reports that, “The Singapore government will help nurture local companies compete in international markets, but will not force its sovereign wealth fund Temasek to finance them as suggested by some legislators, Prime Minister Lee Hsien Loong told parliament on Wednesday.

‘Government wants to help companies grow, is trying many ways and is willing to do more,’ Lee said. ‘But we don’t believe that this can be done by the government by simply pouring money, or creating a ‘Temasek II,’ he said.

His remarks were in response to ideas floated by two members of parliament on Tuesday that Temasek could make a greater difference to the island-state by helping home-grown enterprises expand regionally and globally. The government has come under fire from citizens and lawmakers over losses at Temasek, in particular its ill-timed exit from Bank of America which resulted in a loss of over $3 billion.”

read more: Reuters

According to the Business Standard, “the finance ministry and the Reserve Bank of India (RBI) has asked the Securities and Exchange Board of India (Sebi) to examine whether a proposal by Temasek Holdings and Government of Singapore Investment Corporation (GIC) to increase their stakes in ICICI Bank would trigger the takeover code under which they would have to make an open offer to buy an additional 20%. The Singapore government has sought clarification on a proposal for the two companies to increase their stakes in ICICI Bank to 20 per cent, each holding 10 per cent. This would collectively make them the largest shareholders in the country’s largest private bank. Currently, Life Insurance Corporate is the single largest shareholder with 9.38%. The two Singapore investment vehicles currently hold 10.3 per cent in the bank — Temasek 8 per cent and GIC 2.3 per cent.

Sebi is yet to take a final view on the issue, sources said. The issue hinges on whether the two entities should be treated as one entity or not.”

read more: Business Standard

According to the website, “Tony Tan Keng-Yam, Deputy Chairman and Executive Director, Government of Singapore Investment Corporation (GIC), Singapore, said there would likely be a shake-out in the financial system into two tiers: first, a core of tightly regulated, large commercial banks working with lower levels of leverage than in the past; second, a group of “quasi banks” (private equity, hedge funds, etc.) with a different regulatory structure from commercial banks and no access to the central banks. Investment banks would probably come somewhere in-between, he said. It was normal that governments had intervened to prop up confidence. Now the question was how they would extract themselves in a way that provides incentives to shareholders, who will be necessary for a strong banking sector in the future. He also warned of the dangers of over-regulation stifling creativity.”

read more: World Economic Forum

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