Singapore’s US$200 billion state investor seeks more US holdings

Temasek Holdings signage (AFP pic)

SINGAPORE: Singapore’s $200 billion state investor is gearing up for more deals in the US.

Temasek Holdings Pte says it’s “underrepresented” in the world’s biggest economy with about 15% of its holdings in that market, and is “comfortable” increasing that to more than a fifth, according to John Vaske, Temasek’s joint head of North America.

“From a broad investor mindset perspective, we want to have more representation in the US,” Vaske said in a Bloomberg Television interview on the sidelines on the Milken Institute global conference in Beverly Hills, California. “We see plenty of opportunities each and every week. We see that trend continuing.”

The approach to the US will follow the sectors and themes that drive Temasek’s investment strategy – telecommunications, media, technology, life sciences, agriculture, tech-enabled consumer businesses and financial services, he said.

Its biggest US holdings – based on filings – include Dell Technologies Inc., PayPal Holdings Inc. and Gilead Sciences Inc.

‘Disruptive change’

“Anything, where technology is driving disruptive change or evolution, is definitively something we want to be part of as an organisation,” he said, declining to say how quickly the state-owned investment firm will scale up its holdings in the country.

Temasek had S$308 billion (US$226 billion) in assets under management as of March 2018, based on the latest figures provided by the company.

China now accounts for about a quarter of the holdings, while Singapore is slightly ahead as its biggest investment destination.

Still, Temasek will be buying more at a time when the US government is increasing its scrutiny of foreign investments into the country.

Vaske says that hasn’t affected Temasek, which has offices in New York and San Francisco.

“No one that we talked to as part of that process thought that Singapore, generally speaking, or Temasek, specifically, was a bad actor,” he said. “In fact, they want our investment dollars coming to this market, so I think they will work with us constructively.”

Late cycle

The company is also cognisant it will be acquiring more following a long run of economic expansion in the US, where stocks also rose above their record high at the start of the week – even after the International Monetary Fund cut its outlook for global growth to the lowest since the financial crisis a decade ago earlier this month.

“It’s obviously late in the cycle,” Vaske said. “So from an underwriting perspective, we want to make sure that we contemplate some form of recessionary environment during the period of time under which we will probably own the investment. But it’s not something we’re obsessed with per se.”

Vaske joined Temasek in January 2017 after almost three decades at Goldman Sachs Group Inc.