Back in the early 2000s, it puzzled me that Temasek Holdings chose to describe itself as an Asia investment company headquartered in Singapore; and its key portfolio holdings as Temasek-linked companies instead of government-linked companies.
At the time, more than 90 per cent of Temasek’s portfolio consisted of local corporate stalwarts such as DBS, Keppel, SIA and Singtel. While these companies had independent boards and professional managers, they were also important pillars of Singapore’s economic development.
As Temasek expanded over the last two decades, it has indeed become much more than just a vehicle through which the government holds its local corporate interests. As at Mar 31, 2025, these Singapore-based Temasek portfolio companies (TPCs) accounted for only 41 per cent of its net portfolio value of S$434 billion.
Global direct investments (GDIs) – which comprise stakes in far-flung companies such as Dutch fintech Adyen, Indian hospital operator Manipal Health Enterprises and Chinese technology giant Tencent – accounted for a further 36 per cent.
Temasek’s interests in various partnerships, funds and asset management companies (PFAs) accounted for the remaining 23 per cent of its net portfolio value.
Yet, this expansion has arguably made it even more difficult to put a label on Temasek. Big investment companies are often known for a particular philosophy or approach, or a focus on certain asset classes.
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The late John Bogle’s Vanguard Group is best known for low-cost passive investing. Stephen Schwarzman’s Blackstone Group is often described as an alternative asset management firm. Warren Buffett’s Berkshire Hathaway has been an inspiration for long-term, value-oriented stock investors around the world.
Temasek’s approach and focus isn’t quite as obvious. Managing the TPCs, GDIs and PFAs within its portfolio requires a vast array of strategies and networks.
Last week, Temasek unveiled changes to its organisational structure that might shine more light on how it operates. With effect from Apr 1, 2026, the three key segments of its portfolio will be managed by separate wholly-owned entities.
Temasek Singapore (TSG) will manage the TPCs; Temasek Global Investments (TGI) will handle the GDIs; and Temasek Partnership Solutions (TPS) will oversee the PFAs.
The way I see it, if these three divisions also separately report their performance over one-year periods, and regularly provide updates on how they are executing and evolving their strategies, it could go a long way in raising the global profile of Temasek and perhaps the Singapore market too.
Managing the GDIs, TPCs and FPAs
Temasek provides a fair amount of information about its investment approach and key strategies in its annual reviews.
Notably, it has said that its GDIs are aligned to four structural trends: digitisation, sustainable living, future of consumption, and longer lifespans. “These trends are interconnected, transcend sectors and countries, and persist through economic cycles,” Temasek said, in its most recent annual review.
Other aspects of its approach disclosed in the recent document included how potential investments are assessed, how it applies its environmental, social and governance framework, and even its attitude to early-stage investments.
Last week, Temasek also offered some views on what it takes to effectively manage its GDIs, TPCs and PFAs.
In the case of GDIs, Temasek is generally a minority investor simply aiming to maximise its financial return over a finite period of time. The main capability required here is a strong investment team to source, evaluate and execute deals.
Managing the TPCs requires more operating capabilities. As the controlling shareholder of these companies, Temasek isn’t just concerned about financial returns but also whether they are adapting their businesses to a changing world and the emergence of new technologies.
With an indefinite holding period, Temasek’s primary goal with the TPCs is to help them become better companies, with high-calibre boards, strong management teams, credible business strategies and optimised capital structures.
Meanwhile, the PFAs are an avenue for Temasek to deploy capital for relatively long periods of time alongside other investors. Being able to select good managers, and forge strong partnerships that open new investment opportunities are crucial here.
Temasek said last week that its asset management companies – which had S$90 billion under management as at Mar 31, 2025 – are going through a strategic review.
Making TPCs more “pure play”
Given the varied capabilities Temasek requires to manage its TPCs, GDIs and FPAs, placing them under three separate entities makes a lot of sense, in my view.
It could result in each of these portfolio segments receiving more focused attention, and foster a better understanding among Temasek’s stakeholders of the opportunities and challenges it faces.
This is all the more important as Temasek navigates the shifting tide of global capital driven by trade tariffs, geopolitical tensions and the rise of artificial intelligence. With separate entities managing its TPCs, GDIs and FPAs, Temasek might be better positioned to express how these big trends are affecting the performance of its portfolio.
Having the TPCs managed by a separate entity might also draw the attention of global investors to the long-term potential of these blue chip companies as well as the Singapore market.
This column noted in August that the strong performance of TPCs such as DBS, Singtel and ST Engineering contributed significantly to Temasek’s increased portfolio value during its financial year to Mar 31, 2025 (FY2025); and helped the Straits Times Index deliver an exceptionally high total return of nearly 30 per cent.
Last week, Temasek offered some views on how it may continue adding value to the TPCs. “One thing that we are doing is to make sure that our companies are as ‘pure play’ as possible. Conglomerates are out of fashion and have been for some time, but we have to make sure they’re all competitive,” said Temasek’s chief executive Dilhan Pillay Sandrasegara.
He went on to recount how Temasek helped Sembcorp Industries and Keppel hive off their struggling offshore and marine operations – which are now held under Seatrium – and add billions of dollars to their market value.
“I’m not saying we can replicate this with other companies at Temasek. There are still companies, of course, which are competing with each other. But if we put our minds to it, together with the management teams and the boards of those companies, we can create value for shareholders,” he added.
Report one-year TSRs
In keeping with the strategy of managing its TPCs, GDIs and FPAs via separate entities, Temasek should perhaps begin reporting the performance of each of these portfolio segments over one-year periods.
Temasek said in its most recent annual review that its portfolio delivered a 10-year total shareholder return (TSR) of 5 per cent per annum up to Mar 31 2025, and a 20-year TSR of 7 per cent per annum. “Our TSR over different time periods is a snapshot of our performance, with the longer time periods being more representative of our performance as a long-term investor,” it said.
However, in its annual reviews for FY2004 and FY2005 – when most of its portfolio still consisted of TPCs – Temasek also provided TSRs for the preceding one-year, two-year, three-year and five-year periods.
As Temasek revamps its organisational structure to manage its increasingly large and sophisticated portfolio more effectively, reporting the TSRs for the three key segments of its portfolio over short periods of time may help its stakeholders keep abreast of its unfolding evolution.
