Temasek Holdings, an investment fund owned by the government of Singapore (Singapore Minister for Finance is the sole shareholder), is exiting traditional finance to focus on Fintech. This is according to a report in the Straits Times that said Temasek has sold of its holdings in big investment banks like Goldman Sachs and Morgan Stanley to focus more on Fintech. The write up described the move by Temasek as “an important shift in Temasek’s thinking.”
Png Chin Yee, Temasek’s senior MD for China, responded to questions about its portfolio last month saying;
“So maybe I can just address the financial services question. As Rohit [Sipahimalani] pointed out, almost all of our exposure before 2011 was actually in banks. Today insurance is about 15% of the overall financial services portfolio and really we went into insurance because of the theme around rising affluence, we see insurance as a sector where penetration was very low compared to the banking sector. In Asia, in emerging markets we thought that there was a lot of tailwinds for growth, and then later we identified payments as a very interesting sector given the rise of e-commerce. We felt that digital payments, online payments were growing in importance and so our payments portfolio is now around about 3% of the overall financial services portfolio.”
Temasek reported a record valuation for its portfolio standing at S$ 308 billion as of March 31, 2018. One year shareholder return came in at 12%. Since inception in 1974, Temasek has delivered an annualized return of 15%.
The AAA rated fund invests in a wide array of industries including: financial services, telecommunications, media & technology, consumer & real estate, transportation & industrials, life sciences & agribusiness, as well as energy & resources.
Overall, Temasek’s investment strategy has four themes:
- Transforming Economies
- Growing Middle Income Populations
- Deepening Comparative Advantages
- Emerging Champions
Singapore has recognized Fintech as strategically important to its economy and has thus focused considerable resources on encouraging its development.