Temasek's private investments rise to record, flags cautious environment

By Anshuman Daga and Aradhana Aravindan

SINGAPORE (Reuters) - Singapore state investor Temasek Holdings flagged an uncertain outlook for global economic recovery and a challenging environment for long term investors even as it reported record high private holdings in its total portfolio.

Ranked among the world's biggest investors, Temasek's net portfolio value fell 2.2% to S$306 billion ($224 billion) in the year to March 2020, the first drop in four years, it said in July.

"Increased geopolitical tensions and technology bifurcation could result in a more uncertain environment for long term investors and asset owners," Yeoh Keat Chuan, a senior managing director at Temasek International, told reporters in a virtual news conference on Tuesday.

Senior executives said the coronavirus pandemic had not significantly altered Temasek's investment strategy in the long term.

However, the crisis had accelerated structural trends that guide Temasek's investment decisions, such as those driven by demographic shifts and changing consumption patterns, as well as enabled by technological advances.

Temasek remains anchored in Asia, with exposure to the region of 66% as measured by underlying assets, most of which are in China and Singapore. But the United States again accounted for the largest share of its new investments in the latest year.

Key portfolio holdings include DBS Group <DBSM.SI>, China Construction Bank <0939.HK>, Alibaba Group <9988.HK> <BABA.N> and Standard Chartered Plc <STAN.L>.

Unlisted assets made up a record 48% of Temasek's portfolio in the year to March, up from 42% a year earlier.

"Our ability to invest both in the private and public space gives us a competitive advantage relative to those whose mandates are actually more constrained," said Png Chin Yee, head of financial services.

Temasek's portfolio exposure to China increased to a record 29% in the latest year from 26% a year earlier, while exposure to Singapore fell to 24% from 26%.

Temasek was among global investors who participated in a 2018 funding of Chinese financial technology firm Ant Group.

Ant now plans to list simultaneously in Hong Kong and Shanghai, in an IPO that sources have said could be the world's largest.

Png said Temasek liked what Ant was doing in China's financial services sector. "There is quite a lot of potential for Ant going forward still," she said, declining to comment on Temasek's position regarding Ant's IPO.

(Reporting by Anshuman Daga and Aradhana Aravindan; Editing by Kenneth Maxwell)