Temasek's pivot to private investment heralds billion-dollar listed asset sales

Singapore's Temasek Holdings is shedding the skin of a sprawling sovereign investment house, cutting stakes in big publicly listed companies as it puts more money into growing private companies and private equity firms in search of better returns. --
Singapore's Temasek Holdings is shedding the skin of a sprawling sovereign investment house, cutting stakes in big publicly listed companies as it puts more money into growing private companies and private equity firms in search of better returns. -- ST FILE PHOTO: KUA CHEE SIONG 

SINGAPORE (Reuters) - Singapore's Temasek Holdings is shedding the skin of a sprawling sovereign investment house, cutting stakes in big publicly listed companies as it puts more money into growing private companies and private equity firms in search of better returns.

Under the guiding hand of chief executive Ho Ching, the wife of Singapore's prime minister, the US$170 billion (S$217 billion) state investor is morphing into a leaner form. The firm's returns have often lagged its own internal metric in recent years due to its focus on big stocks.

The evolving strategy at the world's ninth-largest sovereign fund is significant to corporate and financial professionals across the globe. Temasek deals worth $159 billion in the last 10 years have generated big bankers'fees.

New-look Temasek is already showing that it will shed more stakes and be more selective in providing money to large, listed global companies that come knocking in their hour of need, as they did before and after the 2008 financial crisis.

The state investor has been seeking to sell a stake in Thai telecoms operator Shin Corp worth about US$3.1 billion by market value, as reported by Reuters last month , and last week was arranging the sale of a stake in Seoul Semiconductor Co.

"Now they're allocating capital in smaller chunks to these publicly listed firms, so that they are no longer a significant stakeholder in the company," said Melvyn Teo, a professor of finance at Singapore Management University who has observed Temasek's strategy closely over the years.

Temasek has also increased investments in unlisted companies, such as the US$500 million stake it bought in financial data provider Markit Group last year. Holdings of this kind accounted for 27 per cent of its portfolio by the end of March 2013, up from 22 per cent at end-March 2011.

Jeffrey Fang, a Temasek spokesman, said, "As an investor and owner, Temasek has full flexibility to deploy our capital across a range of company structures, geographies and sectors."