On Tuesday afternoon, Temasek announced its FY23 results, and it was not pretty. For the year ended March 31, 2023, the Singaporean investor booked a -5.1% SGD return (or -3.4% in USD) and a -5.2% loss in portfolio value, from SGD 401 billion (USD 298 billion) to SGD 382 billion (USD 288 billion).
Our analysis of the Review 2023 is summarized in the following key considerations:
The investment return of -5.1% (SGD) in FY23 is the worst reported by a Sovereign Investor so far, and it compares to 4.4% (PSP), 1.5% (GPIF), 1.3% (CPP) and -4.1% (NYSCRF) in the same period;
Portfolio value dropped to US$ 288 billion, but still makes Temasek the world's 10th largest "SWF";
The drop in value comes mainly from the international portfolio, including realized losses (e.g., FTX’s US$ 275 million write-off) and unrealized gains. The domestic portfolio, including Singapore Airlines which was 6.1% up in the fiscal year, performed quite strongly;
Temasek has reduced its deal activity drastically: investments are down 49% and divestments are down 26% in terms of value;
The portfolio allocation in terms of asset classes and regions has barely moved, but the industry weights shed a light on the lower Venture Capital activity: lower weight in Financials and Technology investments.
In terms of sustainability, the portfolio emissions are slightly up as expected coming from covid-19; but the organization is still on track to achieve net zero by 2050;
The total headcount increased 9%, with the Singapore-based professionals experiencing the largest growth, and the proportion of Singaporean nationals the highest in 10 years: 62% – which suggest a strong graduate recruiting activity in the past 12 months;
The new office in Paris, which was initially targeted to open the first half of 2023, is now delayed to 2024 according to website – but location has been secured at 43 Avenue de L'Opéra (8th arrondissement);
Temasek continues to have a very sophisticated approach with a focus on the 2030 strategy and a transition into thematic investing across the portfolio; and
The institution is allegedly getting ready for a year of celebrations as the institution turns 50 years old in 2024.
The results come a few days after we announced that the Singaporean investor had come out as leader of our 2023 GSR scoreboard exercise, which assesses best practices around governance, sustainability, and resilience. Do not miss the rare and insightful 6-page feature and interview at https://globalswf.com/reports/2023gsr#gsr-leader-2023-4.
July is a busy month for Singapore, given its three major investment institutions – MAS, GIC and Temasek close accounts on March 31 and report results in July. This year, MAS went first and reported its largest net loss in history, US$ 22.8 billion, mainly due to its aggressive monetary policy tightening to bring down inflation. Temasek has now posted a US$ 5.3 billion loss, and GIC is expected to publish its results at the end of the month.
Elsewhere, BCI from Canada will release its annual report for the same period ended March 31, 2023 tomorrow.