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Temasek suffers annual losses, aims to reshape portfolio

The sovereign fund, whose portfolio recently recouped some of the value it had lost in the past fiscal year, has not made clear how its private equity investment strategy may shift.

Temasek Holdings' investment portfolio lost roughly 30 percent of its value in the past fiscal year, ended in March.

“We certainly did not anticipate the speed or the depth of last year’s global financial crisis. Nor did we expect the crisis to originate from the US,” said chief executive Ho Ching, who has come under fire for the portfolio’s over exposure to the financial services sector.

Despite the annual losses, from the end of March to the end of July, the portfolio's value gained 32 percent for a total value of S$172 billion ($122 billion; €83 billion).

Ho attributed the recent increase in portfolio value to the “markets’ recovery in general”. She made the remarks at a press conference in Singapore coinciding with the release of the sovereign fund's annual review.

Temasek said it will continue to actively reshape its portfolio mix, although it is unclear if this will affect its private equity allocation. The sovereign fund does not disclose any figures as to its asset alloction mix.

Asked if Temasek intends to make investments through the asset class and how any “reshaping” would change its private equity investment activities, Ho said private equity is “not a large part of our activity”. She added that, “Going forward, there will be changes depending on the kind of credit and leverage available.”

Temasek has in the past been an active private equity investor via commitments to private equity funds and direct investments.

Since 1998, it has committed at least $20.4 billion to 24 private equity funds, including those managed by The Carlyle Group, FountainVest and MBK Partners, according to sister data provider Private Equity Connect.

In July, Reuters reported that Temasek was in talks with state-backed Bank of China to launch a fund that will raise between $1 billion and $2 billion for investments in Chinese infrastructure. In the same month, it also said it was considering joint investments with “sophisticated co-investors” for the first time.