Temasek Holdings focused more on "private and negotiated" investment opportunities in the past year rather than publicly listed assets, as equity market valuations have generally been quite high, the firm said yesterday at the release of its annual Temasek Review.
It also continued to seek out opportunities in areas that ride on long- term growth trends, such as technology, life sciences, agribusiness, non-bank financial services, consumer and energy and resources.
Over the past six years, its investments in these focus areas rose from 8 per cent of its portfolio to 24 per cent last year, delivering better returns than the portfolio as a whole.
Last year, such investments included stakes in Amazon, Chinese online travel reservations platform Ctrip and Impossible Foods, a company developing plant-based meat and dairy products. One of its largest investments was US$800 million (S$1.1 million) in Verily, a life sciences research and engineering outfit spun off from Google.
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Overall, financial services and telecommunications, media and technology (TMT) remained the two biggest sectors in Temasek's portfolio, though even within these two areas, Temasek has taken steps to invest in new growth trends.
Within financial services, for example, Temasek had $9 billion committed to non-bank companies last year, up from less than $1 billion in 2011. In TMT, its portfolio now includes $17 billion in technology and media firms, up from $4 billion in 2011.
Mr Chia Song Hwee, the joint head of Temasek's investment and portfolio management groups and joint head of Singapore, noted that the United States has been fertile ground for opportunities in Temasek's new focus areas, but added that Temasek is still very much committed to Asia as well, including Singapore, China and India.
He said: "China remains a key investment destination. It still accounts for 25 per cent of our portfolio value. Although it looks flattish year on year, the absolute dollar amount has increased."
Temasek noted that it also has an increased focus on private and negotiated deals, but that competition for such investments is intense.
Mr Rohit Sipahimalani, the joint head of portfolio strategy and risk and joint head of India, said that in such an environment, Temasek has to demonstrate the value it can bring to companies that it wants to invest in.
"If you look at the investments that we have done in the last year in the US and Europe, we almost never win in an auction - we are very bad at auctions - a lot of these have been privately negotiated deals.
"In all these cases, the big value- add they see from us is, one, as a patient, longer-term investor that doesn't have a fund life, what we can offer is different from traditional private equity firms; and (second), the benefits we can bring them through our networks in Asia."