GIC was most active state-owned investor in 2020; Temasek top in tech sector: Report

It noted that GIC deployed US$17.7 billion in 65 different deals last year, propelling it to the top of the ranking.
It noted that GIC deployed US$17.7 billion in 65 different deals last year, propelling it to the top of the ranking.PHOTO: BLOOMBERG

SINGAPORE - Singapore sovereign wealth fund GIC emerged as the most active state-owned investor globally last year amid the coronavirus pandemic, while Temasek Holdings was the top tech investor.

These were the results of a report by Global SWF, a financial firm that tracks the activity of state-owned investors.

It noted that GIC deployed US$17.7 billion (S$23.5 billion) in 65 different deals last year, propelling it to the top of the ranking.

It was closely followed by Canadian public pension fund CPP, which made US$15 billion in 33 investments, Canadian fund CDPQ and UAE investment company Mubadala.

The report said: "The capital invested by state-owned investors contracted significantly during 2020. During the peak of the pandemic, deals were negligible due to logistical problems - investment executives were not able to get their committees to sign off on their proposed acquisitions without a physical meeting.

"Later in the year, it was more a matter of caution, especially among those sovereign wealth funds that could still face capital calls to cover fiscal deficits."

Overall, state-owned investors made 503 deals worth US$162.3 billion last year, compared with the 499 deals in 2019, but which were worth a larger US$199.4 billion.

The report studied 438 state-owned investors, including sovereign wealth funds and public pension funds, which jointly manage over US$27 trillion in assets.

It also highlighted technology as a major target sector, with a fifth of the investments carried out in 2020 in technology, media and telecommunications.

"However, there was a sharp pivot away from fintech and towards information technology, and life sciences and biotech," the report said.

"On the one hand, state-owned investors appeared to be reluctant to expose themselves to a high-risk financial services sector at a time of plummeting household spending, while on the other, they were seeking opportunities created by a black swan event that looks set to define future trends in tech."

Singapore's Temasek emerged as the top tech investor, investing around US$2.3 billion in tech-related sectors especially in e-commerce and life sciences, it added.

GIC was the second-biggest direct investor, with US$2.2 billion, and led investment in data centres and cloud technology.

Besides technology, healthcare rose as a target sector, with investments going into firms pursuing vaccines and biotech.

The report noted that Temasek led a US$250 million private placement in Germany's BioNTech, which paid off with the discovery and approval of a Covid-19 vaccine developed in conjunction with pharma giant Pfizer.

Tech related to food production and agriculture is also rising as an investment target sector.

"The dominance of GIC and Temasek in this segment should come as no surprise given Singapore's lack of sufficient land for crops," it said.

Last year, Temasek extended its portfolio into urban farming and spent US$365 million in acquiring an 85 per cent stake in Israel's Rivulis Irrigation, which applies smart technology to agricultural systems.

Other allocations included US-based Impossible Foods and Australian start-up V2Food, which help drive ethical consumer food choices.

Meanwhile, GIC led a US$250 million round by Apeel Sciences, which is creating solutions for food waste,

Real estate and infrastructure continue to be important parts of the portfolios of state-owed investors, the report said. But the number of deals related to real assets fell.

"Furthermore, we saw a change in pattern, with state-owned investors being less attracted to fancy hotel brands and to core real estate in major cities, and devoted more to logistics, data centres, warehouses, senior facilities and student housing," the report said.