Don’t meddle with GIC, Temasek’s mandates

[SINGAPORE] Several questions were raised in Parliament last week about whether Singapore sovereign wealth fund GIC and investment company Temasek have been generating satisfactory risk-adjusted returns, and whether their contributions to the national Budget can be relied upon.

The last thing the government should do is to push these institutions to deliver higher investment returns. With elevated stock valuations and an uncertain outlook for global growth and inflation, this is probably the wrong time for long-term investors to embrace risk.

It might, however, be a good idea to encourage GIC and Temasek to provide more granular information about the performance of key segments of their portfolios. Given their long-term focus, the information does not necessarily have to relate to their most recent trades, but to key investment decisions that have contributed to, or detracted from, their performance over time.