http://www.bloomberg.com/apps/news?pid=20601080&sid=axCB2V7W4uko
Bloomberg.com, 29 Jul 2009, Shamim Adam
Temasek to Hang on to
‘Family Jewels,’ Allow Public to Invest
July 29 (Bloomberg) -- Temasek Holdings Pte vowed to hang on
to the “family jewels” as a long-term investor and
said it may allow the public to invest in Singapore’s state-run
fund.
The value of the company’s
assets dropped by more than S$40 billion ($27.8 billion) in the 12
months ended March, Chief Executive Officer Ho
Ching said in a speech in Singapore today. The investment firm will
act to enhance value over as long as 30
years and will not sell stakes “for
divestment’s sake,” Ho said.
“We don’t intend to raid
the larder nor sell the family jewels for short-term
gains,” Ho said. “We will jealously guard our
interest and will invest, rationalize, consolidate or divest where
it makes sense, where we can achieve clear, sustainable
value.”
Ho, wife of Singapore’s Prime Minister Lee Hsien Loong, drove an
expansion outside Singapore and increased financial assets to 40
percent of a portfolio that has declined as the credit crisis drove
down the value of stakes in Merrill Lynch & Co., Barclays Plc
and Standard Chartered Plc.
Temasek would consider over the
long term creating one more group of stakeholders, and may invite
the public to “co- invest” with the company, Ho
said. It may seek “sophisticated investors” in five to eight years
and retail investors in the next eight to 10 years, she
added.
“It is important to test this over at least one market cycle during
the next five to eight years,” she said. “If this pilot is
successful, we may then consider a co-investment platform for
retail investors in perhaps eight to 10 years’ time.”
‘Pretty Huge Investments’
Temasek was also looking for long-term investors, Ho added.
“You’ve got to balance the conflict between the interests of
shareholders and that of the state, which may not always be the
same,” said David Cohen, director of Asian economic forecasting at
Action Economics in Singapore. “I imagine that Temasek could
attract some pretty huge investments.”
Temasek is the biggest shareholder in five of Singapore’s 10
biggest publicly traded companies by market value, including
Singapore Telecommunications Ltd., Southeast Asia’s biggest phone
company, and DBS Group Holdings Ltd., the region’s largest bank by
assets.
Ho said financial sector investments will still form part of
Temasek’s core holdings. Temasek is still “fairly comfortable” in
the financial sector.
The fund, in the first quarter, sold its 3.8 percent stake in Bank
of America Corp., which bought Merrill Lynch, at a loss that may
have totaled $4.6 billion. Temasek sold its stake in London-based
Barclays at a loss in December and January, Reuters reported on
June 3, citing people familiar with the matter.
Temasek was founded in 1974 to foster development of the island’s
banks, airlines and ports. It owns shares of the island’s biggest
bank and its largest telephone company.
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