Government of Singapore Investment Corporation

Country: Singapore

Established: 1981

US$ Billion: 247.5

Origin: Non-commodity

Entity Structure: Corporate

Transparency Rating: 6

In the 1970s, Singapore had a high national savings rate, thus reserves grew rapidly. The Government of Singapore decided that its reserves would be better invested in longer term and high-yielding assets. These assets would be managed by a new institution, the GIC. Established in May 22 1981 as a private company, it is now a large sovereign wealth fund.

The Government of Singapore Investment Corporation does not own the funds it manages but manages them on behalf of their clients: the Government of Singapore, and the Monetary Authority of Singapore. GIC is wholly owned by the Government of Singapore and has three major SWEs:

    GIC Asset Management Pte Ltd
    GIC Asset Management Group is composed of several departments, including a department that is responsible for the management of GIC’s external managers. Objectives of the GIC Asset Management Group involve outperforming the Morgan Stanley Capital International (MSCI) Indices and Lehman Aggregate Bond Index. Some of the asset classes invested by the departments include the following: Equities, Fixed Income, Foreign Exchange (which includes commodities and money markets), and Alternative Investments.

    GIC Real Estate Pte Ltd (GIC RE)
    GIC Real Estate Group is among one of the top 10 global real estate investment firms in the world. With over 200 investments across more than 30 countries, investing a multi-billion US$ portfolio. Direct property investments include: offices, retail stores, residential, hotels, senior and student housing, and sports and medical facilities. Indirect property investments include: funds, public and private corporate entities, real estate investment trusts (REITs), and real estate debt.

    Notable investments include:
    Seoul Finance Centre, Seoul, South Korea
    Azia Centre, Shanghai, China
    Shiodome City Centre, Tokyo, Japan
    Queen Victoria Building, Sydney, Australia
    Uptown Munich Tower, Munich, Germany
    Westin Paris, Paris, France
    Bluewater Shopping Centre, Kent, UK
    30 Gresham Street, London, UK
    Franklin Centre, Chicago, US

    Subsidiaries of GIC RE include:
    1. Reco Pearl Pte Ltd - Chinese Subsidiary
    2. Reco Shine Pte Ltd - Chinese Subsidiary
    3. Reco Shahzan (M) Sdn Bhd (RECO) - Malaysian Subsidiary

    4. Recosia Pte Ltd - incorporated in Singapore - which is an asset holding company managed by GIC Real Estate Pte Ltd

      Subsidiaries of Recosia pte Ltd include:
    • Reco Bay NSW - A company incorporated in Singapore as an investment vehicle and registered as a foreign company in Australia.
    • Ipoh Pty Ltd - Owned by Reco Bay NSW, it is a specialist CBD retail property, investment and management company.

    GIC Special Investments Pte Ltd
    GIC Special Investment Group was started one year after the inception of the Government Investment Corporation of Singapore. Managing a multi-billion US$ portfolio, GIC SI is one of the world’s largest private equity firms. Investments of GIC SI include: leveraged buyouts, venture capital, growth capital, mezzanine financing, distressed situations, infrastructure and other special situation investments. GIC SI is composed of seven groups which include: The Corporate Services Unit, The North America Private Equity Group, Europe Private Equity Group, Global Technology Group, Asia Private Equity Group, Global Infrastructure Group, and the Global Strategy and Investment Group.

Corporate Governance:
The Ministry of Finance of Singapore represents the dominant authority of the GIC. The Government of Singapore and Monetary Authority of Singapore set the risk tolerance parameters and expected returns for the long term of the GIC. Three board committees are responsible for ensuring that the GIC operates in an ethically and fiscally positive manner. These committees include: Investment Committee, Risk Committee, and Remuneration Committee.

Strategies and Objectives
The fund was established after a decision by Deputy Prime Minister and Monetary Authority of Singapore Chairman Dr. Goh Keng Swee to invest Singapore’s growing reserves worldwide for better returns. Furthermore, the Government Investment Corporation of Singapore is to facilitate government savings necessary to meet power strikes, budget deficits, tax hikes, rising oil prices, currency volatility, global disinflation and to support the nation’s wealth over the long term.

Major Direct Foreign Investments (Public)

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News and Updates

Singapore's GIC, Qatar to underwrite Prudential issue
Reuters reports, "Singapore's biggest sovereign wealth fund GIC and Qatar Holding LLC have committed to underwrite a significant portion of UK Prudential's $20 billion rights issue."
read more: Reuters

Travelport lines up $1.78bn London IPO
Telegraph reports, "The company, which is 70pc owned by private equity house Blackstone, won the equity injection from Government of Singapore Investment Corp (GIC), which will take 7.19pc of the enlarged group. The GIC deal provisionally values Travelport at $3.13bn.

Jeff Clarke, the travel company's chief executive, believed the float would prove GIC "came in at a discount".

"They came in early, large and long-term," he said. "Usually you get preferential treatment with that."

Mr Clarke said the IPO would see more than 50pc of Travelport's enlarged share capital sold to new investors, with the proceeds used to cut its $4.1bn borrowings to a target net debt of $2.3bn. Some of the cash will pay off $600m of pay-in-kind notes. "This is primarily about deleveraging," he said.

The company's other owners, each with 10pc, are Technology Crossover Ventures, One Equity Partners and the management. None of the owners are selling any shares."
read more: Telegraph

GIC says booked loss from $675mln Stuyvesant investment
Reuters reports, "The Government of Singapore Investment Corp [GIC.UL] said on Monday it has already booked losses on its investment in Stuyvesant Town, given the New York apartment complex's debt problems.

"GIC recognised the losses following the ruling by the New York Court of Appeals in October 2009, which precipitated the default," a spokeswoman for the sovereign wealth fund said in response to a Reuters query.

GIC did not disclose its exposure or say how much it wrote off, although court documents indicate the Singapore fund held $100 million of equity and $575 million in mezzanine debt issued by the owner of the Stuyvesant Town/Peter Cooper Village complex in Manhatten. The complex, owned by a joint venture led by Tishman Speyer and BlackRock Inc (BLK.N), on Friday said it missed making a loan repayment, in a move that may trigger a foreclosure."
read more: Reuters

Singapore's GIC to buy S.Korea shopping mall for $177 million
CNBC reports, "the Government of Singapore Investment Corp (GIC) will buy two shopping malls in Seoul from South Korea's E-Land Group for 220 billion won ($177 million), media reports said. According to a Reuters report, a South Korean ministry official said GIC had submitted an application to the Ministry of Land, Transport and Maritime Affairs last Friday to launch a real estate investment trust to buy the properties. E-Land, which specializes in the retail, fashion and leisure businesses, will lease back the New Core Outlet and Kim's Club Mart buildings and will have the right to buy them back five years later, Reuters said citing E-Land sources. The transaction is expected to help E-Land shore up its balance sheet after it scrapped Hong Kong IPO plans for a unit last year, and in the face of stiff competition from other shopping malls and food outlets. "
read more: CNBC

Singapore Sovereign Wealth Fund, GIC & the Canada Pension Plan Investment Board enter into a Joint Venture with Cyrela Commercial Properties S.A
According to the Press Release, "Pursuant to CVM Instruction 358 of January 3, 2002, Cyrela Commercial Properties S.A. Empreendimentos e Participações (“CCP”), a commercial property development and leasing company with shares traded on the São Paulo Stock Exchange (BOVESPA) under the ticker CCPR3, informs its shareholders and the market in general that, on July 7, 2009, it entered into an agreement establishing the basis for a joint venture with BRCOMPROP DEVELOPMENT JV PRIVATE LIMITED, an affiliate of GIC Real Estate, the real estate investment arm of the Government of Singapore Investment Corporation (“GIC Real Estate”) and CPPIB US RE-A, INC, subsidiary of the Canada Pension Plan Investment Board, (“CPPIB”), with the purpose of acquiring, holding, developing, building, leasing, managing and selling assets in the retail, industrial and office real estate segment in Brazil (“Joint Venture”).

The investments of GIC Real Estate and CPPIB will be made through CCP18 DE MASTER LIMITED PARTNERSHIP, a company especially set up for this purpose pursuant to the laws of the state of Delaware, United States of America, with CCP Asset Management LLC, a whollyowned subsidiary of CCP, as its general partner (“Company”) being responsible for the allocation and management of the funds committed. The Company, in turn, will directly or indirectly invest, jointly with CCP, in specific purpose companies headquartered in Brazil, which will invest in retail, industrial and office real estate properties.

The investments committed by the parties to achieve the objectives of the Joint Venture total US$ 400 (four hundred) million and will be made in the ratio of 25% by CCP, 37.5% by GIC Real Estate and 37.5% by CPPIB.

This Joint Venture aims to combine CCP’s expertise in the Brazilian commercial real estate markets (office buildings, shopping centers and industrial facilities), with GIC Real Estate’s and CPPIB’s global investment expertise.

This partnership underlines CCP’s commitment to the Brazilian real estate market and its confidence on the growth prospects for the commercial property sector in the country.
read more: Cyrela Commercial Properties S.A - Press Release

GIC makes new management appointments
GIC Press Release states, "GIC today announced the following top management appointments that will take effect from 1 July 2009:

1.Dr Richard Hu will retire as Chairman of GIC Real Estate Private Limited (GIC RE) and Mr Lee Ek Tieng will retire as Chairman of GIC Asset Management Private Limited (GAM). Dr Hu and Mr Lee will continue to serve GIC as Advisers to the GIC Group Executive Committee."
read more: GIC Press Release

GIC converts its convertible preferred notes in Citigroup to commons shares
GIC Press Release states, "GIC has agreed to convert its convertible preferred notes in Citigroup to common stock.

Citigroup’s exchange offer enables GIC to exchange its convertible preferred notes to common stock at an exchange price of US$3.25 a share, compared with the conversion price of US$26.35 under the original terms of the investment. As a result, GIC’s equity ownership of Citigroup will rise to an estimated 11.1%, without any injection of additional funds.

As a shareholder, GIC supports the initiative by Citigroup and the US government to strengthen the quality of the bank’s capital base in view of the challenging economic environment."
read more: GIC Press Release

GIC Real Estate Acquires all of Prologis' Interest in Japan's Property Funds And China Operations
GIC Real Estate (GIC RE) acquired, through its affiliates, all of ProLogis' property fund interests in Japan and China operations for a total cash consideration of US$1.3 billion. The transaction is due to be completed in January 2009, subject to fulfilment of conditions precedent.
read more: GIC Press Release

GIC to invest 850 million euros in Sintonia
Bloomberg reports that, "Goldman Sachs Group Inc. will invest 1.7 billion euros ($2.36 billion) in Sintonia, the Benetton family’s vehicle for investments in infrastructure projects, Il Sole 24 Ore said, without saying where it got the information. The investment is less than the 2 billion euros originally negotiated and will be used to reduce Sintonia’s 1.6 billion euros of debt below 1 billion euros, according to the newspaper. Sintonia’s other investors, Mediobanca SpA and sovereign wealth fund Government of Singapore Investment Corp., will invest a total of 1.05 billion euros, Il Sole reported. The Singapore fund will invest 850 million euros and Mediobanca will invest the remainder, the newspaper reported."
read more: Bloomberg

OMERS and Singapore's GIC team up to take $1.25 Billion Oncor Stake
Borealis Infrastructure, an investment company that was formed by the Ontario Municipal Employees Retirement System manages its infrastructure investments. Formed in 1999, Borealis is venturing in a long-term investment with Singapore´s GIC Special Investments to buy a 20 per cent minority stake in the Texas-based utility Oncor Electric Delivery Company from Energy Future Holdings Corp. for $1.25 billion. The investor group will have the right to add two directors to the board of Dallas-based Oncor, Energy Future said today in a statement. The transaction requires the approval of the U.S. Committee on Foreign Investment.
read more: Bloomberg

GIC battles Westfield Group for Liberty International
Liberty International rose by a record in London yesterday, after reports of the largest UK mall owner was in takeover talks to become the biggest in the world. Liberty jumped 9.2 percent to £10.30 (R160), raising the market value to £3.7 billion. Liberty was founded by South African entrepreneur Donald Gordon, who controls 21 percent of the London-based company together with his family. Potential buyers included the Government of Singapore Investment Corporation (GIC), and Westfield Group, the world’s biggest shopping centre owner.
read more: Business Report

GIC buys Westin Tokyo hotel for $715 mln
Through the property arm of the Government of Singapore Investment Corporation, GIC Real Estate has reportedly purchased Westin Tokyo Hotel from Morgan Stanley and Starwood for $715 million.

The 438-room hotel located in the Ebisu district will continue to be operated by Starwood Hotels and Resorts under the Westin brand.
read more: Independent Bangladesh

Websites and Official Reports

GICS site
GIC Report 2007-08

1. All figures quoted are from official sources, or, where the institutions concerned do not issue statistics of their holdings, from other publicly available sources.

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