I was originally from Malaysia; I came here as a teenager and had my education here, so I felt like the country had really helped me a lot.”, At GIC, he thought, “I could have some impact.”, It is also, he says, a good place to work: “We give a lot of opportunities to people, like my own experience, in that it opens the door to world markets. income (equivalent to Dh84.1 billion or Php1.19 trillion) reportedly made by Singapore's Temasek sovereign wealth fund (SWF) in just 12 months in 2017. Currently the ranges within it are 25% to 30% nominal bonds and cash, 20% to 30% developed market equities, 15% to 20% emerging market equities, 11% to 15% private equity, 9% to 13% real estate and 4% to 6% inflation-linked bonds. It is not easy to be a portfolio manager at GIC. Asked if he wants to say anything in conclusion, he turns again to the environment of uncertainty in the world today. “Having a lot of very strong relationships helps, because in most cases we partner with general partners, family offices, even corporates.” That helps to gain access to asset classes where there is a great deal of demand. “That is a very powerful recruitment tool for us. “It’s the government. And not just with Singaporeans: I find it interesting and amazing that a lot of our non-Singaporean colleagues identify with the idea that you would patiently, in a disciplined way, manage a pool of money that would benefit a lot of people.”, Did he feel that way in 1993? “But the unique thing is not what most people see. It is somewhat notorious among external managers for its internal knowledge. Euromoney starts by asking Lim about one of GIC’s key differentiators in the sovereign wealth world: being a first mover in many themes. So, for example, on March 31, 2018, the allocation to real estate stood at 7%, below the intended range, while nominal bonds and cash stood at 37%, above the intended ceiling. Conventional sovereign wealth funds such as Singapore’s Temasek Holdings and Norway’s Government Pension Fund invest overseas, relying on state assets such as foreign exchange reserves, accumulated trade surpluses and natural resource exports. With a network of 10 offices in key financial capitals around the world, GIC invests internationally in develope… Second, the financial statements of the GIC are audited by the Government of Singapore's auditor-general. The … There is, however, a process called the Net Investment Returns Contribution (NIRC), made up of up to 50% of the net investment returns on the net assets invested by GIC, MAS and Temasek, and up to 50% of the net investment income derived from past reserves from the remaining assets. That is a significant benefit.”. Most of the portfolio is managed internally, with an estimated 80% of the fund driven by in-house management. It is unlikely his spirits were greatly improved when he turned up at the Monetary Authority of Singapore offices on Robinson Road to find he had no staff, no secretary, no functioning telephone (it needed a key to activate it and nobody knew where it was) and no chair. Singapore is still an intensely patriotic place and GIC has retained a sense of public duty, no matter how many non-Singaporeans have come and gone through its doors over the years. If it revealed precise values, the fund would unnecessarily expose the full size of Singapore's financial reserves, making it easier for speculators to speculate against the Singapore dollar during periods of market and economic vulnerability. GIC invested in Bridgewater itself early on. And they recognize that the default position is for GIC to earn this long-term risk premium. They need to know how to work out the regulation, to assemble the assets, to make the financing arrangements, a lot of those things that are still somewhat lacking.”. Generally, Lim and his staff are at pains to point out that GIC is just a fund manager on behalf of its client – the government: “We don’t get involved in the spending. Tharman will become deputy chairman of GIC from May 1. It is hard for a lot of governments to do that.”, He takes the same approach when asked about the mystery AuM number. It is Africa's second-largest government investment fund. The whole Marina Bay waterfront has been built, and from the window we can see the cranes of the port being gradually dismantled and moved to new facilities in Tuas, the land to be rebadged as the Greater Southern Waterfront. As a sovereign wealth fund, the GIC's mandate is to invest for the long-term to preserve and enhance the international purchasing power of the funds placed under its management. It might well be one of the biggest too, but the government does not disclose the fund’s assets under management (AuM), reasoning that to do so would be to reveal the size of Singapore’s financial reserves and make it easier to mount speculative attacks on the Singapore dollar. But sometimes better can mean lower risk.”. For them to really add value, they must be better than that. TORONTO, Dec. 1, 2020 /PRNewswire-HISPANIC PR WIRE/ -- Sovereign Pacific Capital, an Asia wealth and asset management organization establishes a USD $500M Sovereign Pacific Fund… Back when Yong Pung How stepped out of his impressive OCBC career to start GIC with no chair there was a clear sense of public duty about the fund. It is fair to say that GIC has been instrumental in the development of the whole fund management industry in Singapore. Although the GIC has the usual corporate structure it has two unique features due to its status as a "Fifth Schedule" corporation in Singapore. ... " The fund comes at … Singapore’s sovereign wealth fund GIC has entered into an agreement with the company and its subsidiaries to set up a strategic retail-led mixed-use properties development platform in the country. “There is a cost to it: the opportunity cost of foregoing beta and the riskiness of the investment. Size of SWFs Assets under management of SWFs amounted to $8.8 trillion as at Sept 14, … ... ADIA is the largest of the current crop of Middle East sovereign wealth funds. Of the three, GIC is the one that most resembles the classic sovereign wealth fund model: diversified across multiple asset classes, investing purely overseas and with a mandate to beat inflation. Few internally even know the magic number. So why do so much internally? Singapore's Richest. Bhutan Economic Stabilization Fund: View Total … “Definitely. The government makes it very clear and is very disciplined about that – to leave GIC alone to just focus on making money. In any event, the challenge of keeping money where you want it to be is most obviously the case in private equity, real estate and infrastructure; private equity in particular because investments mature. It is considered one of the most sophisticated and influential sovereign wealth funds globally. Within that framework GIC has reinvented itself several times, first evolving towards an endowment model well before that was fashionable and then conducting another investment review in 2012 to build an investment model for the future. The real challenge is the investment environment.”, The government itself addresses this in a statement: “By basing the government’s spending on expected long-term returns of the investment entities on the framework, the investment entities [Temasek, GIC and MAS] are not pressured to sell assets, realize capital gains and pay more dividends.”. A number of the GIC's directors and key officers are prominent current or former members of the Government of Singapore, while others are independent directors appointed from the private sector. To be sure, we use a lot of external managers – hundreds of them in all asset classes – but in-house has a cost advantage. New Delhi: Singapore's sovereign wealth fund GIC is in advanced talks to acquire 'significant' equity in Goldman Sachs backed hotel development and investment firm SAMHI, people familiar with the matter said. But it has increased and Lim expects it to continue to do so: “The odds seem quite good, I would say, because there are quite a few of these big events in the world that could drive volatility higher.”. GIC Private Limited (GIC) is a Sovereign Wealth Fund located in Singapore, Singapore Singapore, Asia, and was founded in 1981. Agarwal was principal at public market fund Westbridge Capital. Sovereign wealth funds are pouring cash into clean tech investments, a move that could provide the funding needed to accelerate the development of green … The Mubadala Development Company is a sovereign wealth fund that now operates as the Mubadala Investment Company. Fair enough. GIC CEO Lim Chow Kiat with Industry City (Credit: Industry City, GIC) Singapore’s GIC sovereign wealth fund has acquired a stake in Sunset Park’s Industry City. “I wouldn’t be too concerned about that. During the 2007-8 crisis, Middle East sovereign wealth funds stepped in, buying stakes in important financial institutions and providing needed capital, but registering deep losses. GIC has hired Aditya Agarwal to head its new fund as managing director and is looking to a mid-2021 launch. By and large politics was swinging around the centre. Because everyone is watching. Infrastructure has that particular challenge.”. So, what makes a bankable project? You learn every day.”. It’s not enough that you do better than beta. The … Our mandate is to preserve and enhance the international purchasing power of the reserves we manage. The largest is the Government of Singapore Investment Corporation, now the GIC Private Limited fund. Interest rates have come down and prices have gone up. You have to deliver something risk-adjusted to account for the additional risk you have taken on. Lim laughs. We are very careful and conscientious in succession planning, making sure one generation passes to the next in a fairly deliberate manner.”. “We are fortunate that we continue to have people who stick around. It’s a challenging but interesting job. “We provide the platform for them to do that.”. The Sovereign Wealth Center research group puts the group AuM figure at $398 billion.). But at the same time GIC affords our alpha teams some advantages: the time horizon, the size, the connections that we have with the investee community. “That,” says one employee, “is a burden I don’t wish to carry.”. “There’s capital available, but the pipeline of supply – of bankable projects – is not as strong.”, Although multilaterals do valuable work in trying to help to prepare projects for investors to come in, he says that is a long-term effort and he is concerned about the fact that projects are becoming increasingly politicized “in the name of the rise of consumers, in the name of not giving value away to foreigners and big corporations; which is not a healthy development.”, He worries about changing regulation and notes that particularly in emerging markets, “they need to be more careful with tinkering with any agreements they have already signed, any regulation they have already put in place. “But thankfully, in our case, being early in a number of areas has been quite good.”. The city/state of Singapore has two wealth funds, holding more than $800 billion in total. By using Investopedia, you accept our. It is for information only. According to the Sovereign Wealth Fund Institute, the GICS controls the eighth largest sovereign wealth fund in the world, with $390 billion in assets under management as of mid-2018.[cite]. The Revenue Regulation Fund (RRF) is the sovereign wealth fund of the nation of Algeria. Being in San Francisco in 1986 has allowed for a good education. We work to secure Singapore’s financial future by investing across a range of asset classes in the public and private markets. The Government of Singapore Investment Corporation (GIC) manages funds on behalf of two clients, the Government of Singapore and the Monetary Authority of Singapore. “Because of the long relationship, our collaborations with them typically would be closer and better than others. GIC was an early investor in Techcombank and in January took its stake in Vietcombank to 2.55% following a private placement, having been an early investor beforehand. In fact, the period from Euromoney’s first request for a chief executive interview to this morning’s meeting is 11 years. Thirty-seven years later, sitting in its offices on the 37th floor of Singapore’s Capital Tower, it is fair to say the Government of Singapore Investment Corporation (GIC) has moved up in the world. In that month, the Norwegian Government Pension Fund was the largest sovereign wealth fund (SWF) globally, with managed assets amounting to almost 1.2 trillion U.S. dollars. Insiders say they were working together back when founder Ray Dalio used to answer his own phone. The 2012 investment review brought about a change in approach. Small; Medium; Large; ... said its new venture fund has raised Rs 375 crore from Singapore’s sovereign wealth fund Temasek. Then about 20 strategies are laid over those asset classes. GIC also stands out for its headcount of about 1,500 people, which is thought to be second only to Adia (1,700 employees at the end of 2017). “It is not all smooth sailing, it goes up and down; right after the dot.com bubble there was a winter. The amount that is taken is published in each year’s government budget. He has also written two books. After all, they exist somewhere between the murky grey of return-maximizing, mega-cap asset managers, and clandestine government agencies quietly used to further sovereign agendas. ‘Better’ typically means more return. Cases in point: Was their mass rescue of the West’s banks—Citi, Merrill Lynch, UBS, and Morgan Stanley—during the 2008 financial crisis a collective invest… For example, it is one of the largest real estate managers in the world, despite the fact that real estate should only represent 8% to 13% of the portfolio – and that makes it difficult to keep allocations in some asset classes as high as GIC would like them to be. GTI Capital Group, Equity International and IFC ( a member of the World Bank Group) are the … The Government of Singapore Investment Corporation (GIC) is one of three financial entities that manages the financial assets of the government of Singapore. Good behaviour will be rewarded. As a starting point, you have to justify the right to invest any capital at all. In other words, the international purchasing power of the reserves nearly doubled during the 20-year period. The fund is now officially named: GIC Private Limited. A good example is Vietnam. If GIC were to be at that level and $60 billion represented 7% of the portfolio, GIC would have $857 billion under management and be among the biggest funds in the world. In recent years, we have really stepped up on that.”, GIC holds occasional invitation-only events where a couple of hundred investees or other business partners are invited and encouraged to talk. “I’m like a piece of furniture here,” he says. But this time we truly have the prospect of politics going to extremes, and that is going to have a significant impact on economies and asset prices.”. “I certainly did in my case. “That’s not our prerogative,” he says. He covers the Asia Pacific region and is based in Singapore. GIC Private Limited, formerly known as Government of Singapore Investment Corporation, is a sovereign wealth fund established by the Government of Singapore in 1981 to manage Singapore's foreign reserves. GIC is so influential now that it can be helpful to the companies it invests in, whether through advice or just connections. Nguyen Le Quoc Anh, chief executive of Techcombank, told Euromoney at the time of the bank’s IPO in 2018 that GIC’s knowledge was helpful: “We said [to GIC]: ‘We know how to run a bank, but we need a portfolio company to tell us what else is going on in the region.’”, Lim says: “We are largely a financial investor, so our help a lot of the time is at the governance level and in introducing, sharing our network with our investees. The other is that on the supply side, governments need to have the expertise. The Mumtalakat Holding Company is a government-owned investment organization that manages the sovereign wealth fund for the Kingdom of Bahrain. Groups like Wellington Management and Bridgewater Associates first came to Singapore to service GIC, subsequently diversifying their client list from there. Their job – their key performance indicator, their bar – is to do better than what they have foregone. “I think they recognize that at the end of the day a pool of capital has different uses. “So the team have to make a proposal that what they are going to do will be better than the beta that they have. The Kuwait Investment Authority is a government-owned corporation responsible for managing the sovereign wealth fund of Kuwait. Over the 20-year period that ended 31 March 2019, GIC achieved an annualised rate of return of 3.4% above global inflation. For the moment, GIC invests without much concern about funds being taken away from them; there has only really been one drawdown from the past reserves pool to which GIC contributes, during the global financial crisis, for a national resilience package in 2009. That said, GIC’s long-term return – its main performance metric is a 20-year annualized return – was 3.4% above global inflation up to March 31, 2018. We are an investment company with a global portfolio of S$306 billion (US$214 billion) as at 31 March 2020. GIC is one of the three reserves management entities in Singapore, alongside the Monetary Authority of Singapore (MAS) and Temasek Holdings. First, the approval of the President of Singapore is required to take certain actions, such as the appointment and removal of directors and key managers. “It doesn’t look like it will seriously affect how we operate,” Lim says. The GIC was formed in 1981 with the aim to invest the sovereign wealth fund more aggressively in higher yielding asset classes and over a longer investment horizon. “The guys are working day and night 24/7. We use cookies to provide a personalized site experience. What Is the Government Of Singapore Investment Corporation (GIC)? Global SWF is an innovative and comprehensive Data Platform that tracks over 400 Sovereign Wealth Funds (“SWFs”) and Public Pension Funds (“PPFs”) and provides insights into the portfolios and personnel of the Top 100 of them, in terms of size… Yong had at first politely declined the offer, whereupon Goh Keng Swee, one of the architects of modern Singapore and one of the founders of the MAS a decade earlier, went to OCBC chairman Tan Chin Tuan to ask if he would lend Yong to the national cause. He joined in 1993 as a portfolio manager before rising to head the fixed income, currency and commodities department, and later overseeing investments in Europe, Africa and the Middle East. “But that also means going forward is a lot harder, because yields are so low.”, In the environment of the last 10 years, alpha has been tough to find as volatility has been low. “But still, it is a struggle, partly because competition is very keen. In the last 15 years we saw a lot of influxes of large pools of capital.”, In infrastructure, he says, the challenge is supply, not demand. “I would say that GIC-ans share a lot of what you might call noble purpose,” Lim says. Fifty years of Asia: The region that roared, The profiles: 23 of the biggest names in Asia, Asia '97: The financial crisis that left its mark for good, How Asia's banks fight back against disruption, The bondholder treatment at the heart of the Petropavlovsk brawl, Societe Generale details equity derivatives cuts, Locals dismiss positive thoughts on Argentina’s banks, Capital markets: Litigation funding finds its feet, Finance and Covid-19: The biggest dangers lurk in risk-free markets, Modern Slavery Act Transparency Statement. The city state’s constant regeneration is reflected somewhat by its sovereign wealth vehicles. The Santiago Principles are now observed by more than 20 member SWFs, including GIC. I hope they feel like it is fair game that they have to deliver that.”. This is not exceptional and well below the almost 6% it stood at in 2001, although this is partly a result of the tech stock boom in the late 1990s gradually falling from the long-term numbers, with the post-bubble declines still there. Making the top 10 of that list required about $60 billion in real estate assets as of the end of 2017. GIC has what it calls a reference portfolio, made up of 65% global equities and 35% global bonds. There have been a lot of changes in Singapore in that time. The Government of Singapore Investment Corporation (GIC) is a government-owned company assigned to manage Singapore's sovereign wealth fund. The point Lim makes about relationships with investee companies is important. Its mission is to preserve and enhance the international purchasing power of the reserves, with the aim to achieve good long-term returns above global inflation over the investment time horizon of 20 years. “Beta has done great for the last 10 years,” Lim says. Despite last year's global stock market rally, Temasek Holdings, Singapore's sovereign wealth fund, generated a shareholder return of just 1.5 percent for the 12 months ended March 31, hurt by … Singapore’s sovereign wealth fund GIC is set to launch an India-dedicated public market fund of size up to $3 billion (Rs 22,137 crore), The Economic Times said, citing two people aware of the development. “You said earlier that GIC seems to be unique,” he adds. “I guess being early is not always the best thing,” says Lim. Outsourcing takes place in market segments where GIC doesn’t feel it has the internal capability or if there are opportunistic situations that are brought to it. As of July 2020. The length of time in these markets has also allowed GIC to learn. “Being there, you have more natural exposure to technology investment,” says Lim. The funds come from the high savings and investment rates of the people and businesses in this world-class financial center. What Is the Revenue Regulation Fund (RRF)? It is perhaps a particularly difficult time to do that. Similar to other sovereign wealth funds, the fund's holdings include a range of financial assets. Nowhere else is like Singapore, with three separate sovereign institutions with distinct mandates. We were fortunate that since the 1980s, or even earlier, all this politics didn’t really matter. Along with the Abu Dhabi Investment Authority (Adia) and Norway’s Government Pension Fund Global, it is perhaps the most closely watched, admired and emulated sovereign fund in the world. A sovereign wealth fund is a state-owned investment fund used to benefit the country's economy and citizens. The deal, if materialised, could provide an exit to existing investors, they added. Lim exemplifies this sense of institutional learning. The most unique thing is the governance arrangement. It was the first non-hydrocarbon state to launch a sovereign wealth fund, to set up an office in San Francisco in 1986 in order to get ahead of the tech theme and is considered a pioneer in private equity and infrastructure investment. Has it benefited from its willingness to be an early entrant into new spaces? Things get interesting when you get to the active portfolio, through which managers attempt to add value to the policy portfolio without skewing the amount of risk that is being taken. “All this geopolitical stuff. Then there are a series of building blocks. The GIC currently has approximately US $400 billion in assets under management. But even during those times we learned: how do you pick the right startup, the right entrepreneur, the right business model?”. Internally, the process of taking the money out of beta and into an active position is known as skill-based strategies. It’s hard,” Lim says. About Global SWF Data Platform. While the final size hasn't been finalised, it's keen to allocate $2-3 billion for the purpose, said the people cited above. Historically the fund has maintained a low-profile but was opportunistic as other sovereign wealth funds were during the 2007-2010 U.S. housing crises. I won’t tell our guys they are cheap, but it does.”. “Various reasons,” says Lim, “one of which, of course, is cost. Although it publishes a detailed annual report, GIC doesn’t talk a great deal and Euromoney’s interview with chief executive Lim Chow Kiat has been a long time in negotiation. And bad behaviour will be punished.”, The material on this site is for financial institutions, professional investors and their professional advisers. Next is the policy portfolio. The government has used this contribution for 11 years, principally to top up endowment and trust funds, and it is now the single largest contributor to government revenues, worth S$17.17 billion to the 2019 budget. Investopedia uses cookies to provide you with a great user experience. The role that many sovereign wealth funds (SWFs) play in national economic policy has changed dramatically as a result of the pandemic, giving rise to questions about their future. He highlights private equity: “We benefit from some of the relationships which were built many, many years ago – like 25 years ago. Founding father of modern Singapore and the Minister Mentor Lee Kuan Yew talks about the objectives of Singapore's sovereign wealth fund with Bloomberg. This sets GIC’s asset allocation strategy over the long term. Sovereign Wealth Fund: North America: 92. It is not a benchmark as such, but it represents the overall risk tolerance GIC thinks appropriate in order to generate good long-term returns over global inflation. Text Size. Established in 1981 to manage Singapore’s foreign reserves, GIC is a global long-term investor with well over US$100 billion in assets in over 40 countries worldwide. He has previously been Middle East editor of Euromoney, editor of Asiamoney, investment editor of the Australian Financial Review and a correspondent on emerging markets and sovereign wealth for numerous publications worldwide. The GIC does not report exact fund details in its annual profit and loss disclosures. Since their formal arrival on the investment scene in the 2000s, sovereign wealth funds (SWFs) have been met with a healthy mix of curiosity and trepidation. Current Assets for GIC is $453,200,000,000 and SWFI has 406 periods of historical assets, 80 subsidiaries, 2,805 transactions, 31 Opportunities/RFPs, 285 personal contacts available for CSV Export. But this is nothing more than educated guesswork. In 2008, GIC participated in the pioneering effort, alongside Abu Dhabi Investment Authority and the US Treasury, to develop the 9 Generally Accepted Principles & Practices for sovereign wealth funds (SWFs) and recipient countries. However, the fund does disclose certain five, 10 and 20-year details highlighting performance and risk management metrics. GIC is the world's sixth-largest sovereign wealth fund (SWF) with $440 billion in assets under management. Professionally it has not hindered our work.”. Seconded from his job as vice-chairman of OCBC, which he had one day been expected to run, he was already taking a pay cut to do this new public-service job. Although we don’t know how big GIC is, it is certainly big. Our job is to make sure that we generate good long-term returns. JAKARTA, Nov 17 — Indonesia's new sovereign wealth fund will offer dedicated industry funds in a bid to drum up US$15 billion (RM61.8 billion) investment and deepen access to global capital by South-east Asia's biggest economy, finance minister Sri … GIC is a global long-term investor with well over US$100 billion in assets in over 40 countries worldwide. The Alaska Permanent Fund pays an annual dividend to eligible residents and is funded from surplus oil and gas reserve revenues. It is considered one of the most sophisticated and influential sovereign wealth funds globally. The finance minister at the time, Tharman Shanmugaratnam, made it clear this would not be a regular occurrence. More than one manager has told Euromoney how it pitched up to GIC with its best idea only to find that it was already doing it, and doing it well, internally. Might call noble purpose, ” Lim says own phone won ’ t too. 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