Temasek plans to build its portfolio by increasing exposure in unlisted companies, which have provided better returns than listed ones since 2002.
Listed assets made up about 80 per cent of its portfolio a decade ago, but this is now closer to 60 per cent, Mr Dilhan Pillay Sandrasegara, chief executive of Temasek International, said yesterday.
Mr Sandrasegara told a briefing on the investment firm's annual report that the trend has been under way for the past decade, and is likely to continue.
He noted that this is not a question of Temasek's changing risk profile, but of going where opportunities lie.
The move towards more unlisted assets ties in with Temasek's focus areas, which include technology, life sciences and financial services, added Mr Sandrasegara.
Financial services make up the largest share of its portfolio by sector at 25 per cent, with new investments remaining focused on non-bank fintech and payments platforms. These include China's Ant Financial, which operates the Alipay payments platform, as well as American fintech services company Global Payments.
Technology, media and telecommunications form the next largest portfolio sector at 20 per cent, with new investments in online food-delivery marketplace DoorDash and online ride-hailing firm Ola Cabs.
Six structural trends shape Temasek's investment direction: longer lifespans, rising affluence, sustainable living, sharing economies, smarter systems and a more connected world. Investments in these areas are expected to form a larger part of its portfolio.
Mr Sandrasegara said these trends address the convergence of different sectors and tend to involve earlier-stage developments.
"As we try to engage with these trends and see where they can go... you will see an increase in allocation of capital to that strategy," he added.
Temasek said technology breakthroughs in fields such as artificial intelligence have the potential to transform industries. Its early-stage investments in this area, including indirect investments through venture capital funds, constitute 3 per cent of its portfolio.
These provide "early and deeper insights into innovation", helping it track future opportunities, it said.
CIMB Private Banking economist Song Seng Wun said the environment now of low yields and low interest rates means long-term investors are pushing further into the private equity space for returns.
"When there are big technological shifts and advances, you have many fast-thinking entrepreneurs and businesses who look to exploit the advantages of modern services and technologies. There is potential for higher returns, though this comes with higher risk," he said.