SINGAPORE, Jan 12 — Singapore sovereign wealth fund GIC and state investor Temasek generated returns that are “reasonable and within expectations”, a minister said Monday, as he fended off criticism of their performance.
Some legislators raised questions in parliament after a Financial Times report last month said that the returns of the two giant Singaporean funds lagged behind their global peers.
Temasek and GIC between them manage hundreds of billions of dollars worth of assets.
“Taken as a whole, the government’s assessment is that the returns generated by GIC and Temasek are reasonable and within expectations given their mandates and their risk profiles,” Senior Minister of State for Finance Jeffrey Siow told fellow lawmakers.
“We will continue to review their mandates and performance regularly in line with changes in the global economic investment landscape.”
Comparisons with other funds should be “interpreted in the proper context because different funds operate under different mandates and risk profiles,” he said.
“Our focus has always been on long term performance, rather than on short term or year to year fluctuations.”
He said that in recent years, measures GIC took to moderate risks in case of a sharp correction in equity markets resulted in “some foregone returns” after the prices remained elevated.
“Any assessment of returns must therefore be considered alongside the risks they have taken to achieve them,” he said.
GIC, a conservative, long-term asset manager with a diversified, lower-risk portfolio, has achieved a real return of 3.8 per cent per year over the past 20 years, according to Siow.
Temasek, an active investor which has a higher risk appetite, has reported a total shareholder return of 8.0 per cent per year in US dollar terms over the past 20 years, Siow added.
The Financial Times report said that the performance of GIC and Temasek “compared unfavourably with many global peers”.
Despite being among the biggest and best resourced, both entities were “among the weakest performers among 50 similar global organisations over a 10-year period,” the article said, citing Global SWF data. — AFP
