The returns that state investors GIC and Temasek generate are assessed based on the mandates and risk profiles assigned to them by the government, and have been reasonable and within expectations, a Singapore minister has asserted.
Jeffrey Siow, Singapore’s Senior Minister of State for Finance, noted in Parliament on January 12 that the mandates of two investment entities are centred on generating long-term, sustainable returns, even as they do not operate against specific conventional market benchmarks.
The system, Siow said, is structured to ride out year-to-year fluctuations and protracted market challenges.
Temasek, for one, “is an active, bottom-up investor, and it also has a history and development as a holding company for Singapore portfolio companies,” Siow explained.
“It is not always appropriate or meaningful to directly compare Temasek’s performance with other funds. It really depends on the mandate and the risk profile that Temasek was set up to do.”
He pointed out that Temasek’s Singapore portfolio has been able to contribute both steady returns and to Singapore’s economic growth over the long term.
Further, while the government ensures that Temasek has a competent board to oversee its management, it does not otherwise influence or direct Temasek’s individual investment decisions.
“Beyond exercising the appropriate oversight over its investments, there is no requirement for Temasek to pursue specific strategic or economic development strategies,” Siow said. “Efforts to develop industry ecosystems or to enhance the financing for early-stage startups are led by the government rather than by Temasek.”
The minister highlighted the scheme focused on supporting local deep tech startups under Enterprise Singapore, through which the government co-invests with third-party investors.
Siow added: “From time to time, Temasek may participate in the government’s initiatives, but it does so on commercial terms strictly consistent with its mandate.”
Siow also pointed to GIC’s team of “professionals, [who] have a large pool of assets that range from passive assets to assets that require them to take closer monitoring and to make sure that those assets continue to generate high returns and they [take] active decisions to manage them.”
He added: “They’ve taken the decision to de-risk during periods of distress, during COVID, for instance, in recent years, and if they had not done so, our asset base could have been permanently impaired.”
GIC reported an annualised US dollar nominal rate of return of 5.7% over the 20-year period that ended 31 March 2025. Adjusted for global inflation, GIC’s portfolio recorded an annualised real rate of return over the same period was 3.8%.
Siow was responding to multiple questions filed by members of parliament related to the returns generated by GIC and Temasek, in a session that lasted for nearly three-quarters of an hour.
In December, a Financial Times report described GIC and Temasek as among the weakest performers among 50 similar global organisations, despite being two of the world’s largest and best-resourced state investors. It also pointed to a series of “missteps” at Temasek, referencing forays into China and startups that resulted in losses.
In his responses, Siow said Temasek’s performance has been “commensurate with other sovereign wealth funds with a higher risk profile, such as the Canadian Pension Plan Investment Board.” He noted that CPP generated a 20-year annualised total shareholder return of about 8%, similar to that of Temasek’s.
Last year, Temasek had indicated it was looking to reduce its exposure to early-stage investments in favour of more mature businesses. It has since announced a restructuring of its operations across its private, public, and funds and asset management businesses.
“As Temasek expands its investment activities across new geographies and sectors, it may need to adjust its organisational structure to sharpen its focus and better achieve its objectives,” Siow reiterated in Parliament.
“Ultimately, the government holds the board of Temasek accountable for delivering good long-term returns on its overall portfolio, and that is on the basis of net portfolio performance, after deducting all investment fees and expenses.”
