Temasek Holdings

What Is Temasek Holdings?

Temasek Holdings is a sovereign wealth fund (SWF) — a state-owned company — that manages an investment fund on behalf of the Government of Singapore. Using federal reserves, it focuses on investments located in Singapore, China, and North America, as well as Europe and some emerging economies. Temasek Holdings has a portfolio of approximately SGD $306 billion (US $226.6 billion) as of March 2020.

The investment fund currently has 11 offices globally and manages a wide range of investments and financial services including telecommunications, media and technology, transportation and industrials, consumer and real estate, life sciences and agribusiness, energy, and resources.

Understanding Temasek Holdings

Temasek Holdings was founded in 1974 under the Singapore Companies Act, which incorporated the organization. Incorporation allowed the company to own and manage investments and assets that the Singapore government had previously been responsible for. By relieving the government from the financial aspect task of managing investments, the government’s Ministry of Finance was able to have more time and abilities to focus on policymaking and regulation, as it was designed to do.

The company was originally built on a portfolio of SGD$354 million dollars from shares in companies, startups, and ventures that were held by the Singapore government, including a bird park, a hotel, a shoemaker, a steel mill and an airline.

Although Temasek Holdings has the usual corporate structure, with two unique features that reflect its status as a Fifth Schedule corporation in Singapore:

Despite the fact that the Singapore Minister of Finance is the company’s sole shareholder, Singapore's government is not directly involved in any of the investment or operational decisions on any level of the company. The government is a shareholder as outlined by the Board of Directors, which allows Temasek to operate as a Fifth Scheduled Company.

The rating that Moody's Investors Service assigns Temasek and the debt issued by its financing subsidiary Temasek Financial Ltd.

Though it took a hit in fiscal year 2019, posting only a 1.49% shareholder return, the company boasts a 15% total return since its inception in 1974.

Like any company, Temasek pays taxes to the tax authorities and separately declares dividends to its shareholders.

Special Considerations

Temasek's website emphasizes its "stake in the well-being of our wider community," citing its Temasek Trust, founded in 2007, which funds the Temasek Foundation. This nonprofit is subdivided into six foundations that oversee 23 philanthropic endowments:

Overall, Temasek Holdings claims to have impacted 1,300,000 people throughout Asia and Singapore with its community work and programs.