In its busiest year since the 2008 financial crisis, Temasek Holdings made $30 billion new investments and stepped up divestments to an all-time high of $19 billion.
Temasek did this while global stock markets were still rallying to lock in gains for its financial year ended March 31.
Equities make up the bulk of the Singapore investment company's portfolio, which had a net value of $266 billion, up $43 billion from the record high a year earlier. One-year shareholder return was 19.2 per cent. About half of its new investments was in growing Asia, and 43 per cent in the mature markets of North America and Europe, where it expects an economic recovery.
With an eye to the rising Chinese middle class and the Beijing government's reform agenda, Temasek broadened its exposure to China. Its offices in Beijing and Shanghai helped drive up portfolio allocation to the country to 27 per cent, making it the second largest country holding by asset value after Singapore, which gets a 28 per cent allocation. In China, Temasek likes telecommunications, media and technology businesses, as well as the consumer, insurance, life sciences and agriculture sectors.
Internet company Tencent and taxi-calling app Didi Kuaidi are among its new investments there.
Over the year, Temasek also took profit on about 10 per cent of its long-held stake in e-commerce giant Alibaba after it went public last September. Temasek also sold about 1 per cent of its stake in China Construction Bank, while keeping all the bank's pre-listing shares it has held since 2005. Temasek now holds a 5 per cent stake in the bank and a 2 per cent stake in Alibaba.
Temasek's books reflect a March 31 year-end, but China's stock markets have since tumbled into bear territory, with shares falling as much as 30 per cent since mid-June. This triggered some questions on its China exposure at yesterday's press briefing at the Grand Hyatt.
But Temasek's China head, Mr Wu Yibing, said the short-term correction was just volatility in the long-term growth of the capital market, which Beijing is determined will become "one of the most important in the world".
He added: "We actually view the volatility may present a good opportunity for us to invest as well."
Mr Wu also maintained that Temasek is "very comfortable with the prospects of the Chinese banking system" as the government has "ample tools" to address the credit risks in the system.
Temasek is the single-largest foreign investor in Chinese banks, according to data from SNL Financial.
Outside of China, Temasek's new investments were mainly in consumer businesses, financial services, life sciences and agriculture.
Temasek in March last year paid US$5.7 billion ($7.8 billion) for tycoon Li Ka Shing's Hong Kong-based health and beauty retailer AS Watson, with stores in Europe and Asia.
It also invested in financial services such as US electronic market maker Virtu Financial and Amsterdam payments start-up Ayden.
Other new investments include mobile services firm Virgin Mobile Latin America and e-commerce platforms like Lazada in South-east Asia and Snapdeal in India.
In the US, Temasek's investments in energy and life sciences gained pace. It invested in biotech firms BioMarin and Alexion, and natural gas firm Cheniere. Temasek also lifted its stake in biopharma firm Gilead Sciences by US$800 million. Just last month, Temasek took a stake in North American chemicals distributor Univar.
In Europe, investments included Deutsche Post DHL, gas carrier engineering firm Gaztransport & Technigaz, and Origo, a North Sea oil exploration company.
Temasek has fully sold fertiliser firm Mosaic, pharma firm Medreich, e-book platform Cloudary, and natural gas firm Kunlun Energy.
Over the year, Temasek also built up its real estate assets with investments in London office towers MidCity Place and 22 Bishopsgate.
Sovereign wealth fund GIC is already an active property investor, but Temasek chief financial officer Leong Wai Leng believes there is no overlap here: "The hard asset market is a very large market with lots of opportunities, and I think each of us will make our own decisions based on our own requirements and the returns that we expect."