Letter to the Financial Times: Temasek’s Focus is on Long-Term Shareholder Returns

The Financial Times article "Temasek on deal hunt to boost returns for Singapore" (1 July 2024) contains several inaccuracies and misperceptions about Temasek.

As reiterated in our annual reviews, and the latest Temasek Review 2024published on 9 July, our mandate to deliver sustainable returns over the long term guides our strategy and shapes our portfolio. We do not manage our portfolio based on short-term considerations, let alone election cycles as mentioned in the article.

As part of the national budget, the Government spends every year up to 50% of the long-term expected real returns on its accumulated net assets. There is an independent process to determine the expected long-term rate of return. Contrary to your claim, this is not linked to Temasek's annual profits.

On our part, we are mindful of our responsibility to deliver sustainable returns over the long term. To achieve this, we actively manage our portfolio for performance. But we do not direct the strategies or day-to day operations of our portfolio companies. Rather, we hold them accountable for achieving sustainable returns and shareholder value over the long term. Similarly, our shareholder, the Government, holds Temasek accountable.

The Singapore companies we own today have been stalwarts of Temasek for many years, some since 1974 when Temasek was set up. These include DBS, Singapore Airlines and Sembcorp Industries. The Singapore portfolio companies collectively comprise 40% of our overall portfolio today.

They have historically provided stable returns. In recent years, given the rapidly changing global business environment, some of them have had to re-evaluate their strategies. As an active shareholder, we engage these companies on their strategies and support initiatives that lead to long-term shareholder value.

Lena Goh
Managing Director, Public Affairs
Temasek

Note: The Financial Times has published a summarised version of our response dated 15 July 2024 in their Letters to the Editor section.

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