by Ganesh Sahathevan
Temasek has reportsed a $7 billion loss, and that its one-year shareholder return has turned negative. Readers are however reminded that Temasek did warn in 2021 that it was
happy to suffer lower returns over the next 10-15 years to save Planet Earth.
TO BE READ WITH
Part of Mao Kun map from Wubei Zhi which is based on the early 15th century navigation maps of Zheng He showing Temasek (淡馬錫) at the top left.I t is always important to stick the basics, no matter how outdated they might seem, especially when investing other peoples' money
Temasek Managing CEO Nagi Hamiyeh has declared that Temasek is prepared to underperform international benchmarks for the next 10-15 years in order to save Plant Earth.
In a letter to media Hamiyeh said:
More importantly, Temasek aims to do well, do right, and do good, as an active investor, a forward-looking institution and a trusted steward.
Going for high climate ambition may dent returns marginally for the next 10 to 15 years, but the payoff is a more liveable planet for all - alongside higher long-term returns.
The choice is clear. Temasek has chosen to lean in on carbon abatement and other goals for planet, people and prosperity.
Temasek is probably the only major international investor this far which has admitted that an investment strategy driven by decarbonisation will come at a cost, and not provide the excess returns that many claim it would. 10-15 years is a long time in investing terms.Prosperity is not normally measured in perpetuity.
Letter to the Straits Times: Temasek's portfolio positioned to provide sustainable, long-term returns
21 JUL 2021
We note Mr Alfred Chan Hock Yuen’s comments on Temasek’s performance compared to the MSCI World Index (“Forum: How has Temasek done compared with others?”, The Straits Times, 17 July 2021).
There are various ways of putting money to work.
Theoretically, one could invest all of one’s assets in an index, or hop from index to index for best returns, if one has the foresight and agility to do so.
Temasek could conceivably liquidate all its assets, to become an index investor.
With the MSCI World Index, we would be overweight USA and other developed markets, with less than 10% exposure to the Asian economies; less than half a percent to Singapore.
Temasek has chosen not to do so. Fundamentally, we have confidence in the long term potential of Asia.
At the same time, we have been deliberately reshaping our portfolio towards longer term structural or secular trends like digitisation, sustainable living, the future of consumption, and longer lifespans.
Temasek’s current portfolio is the aggregate result of our bottom-up investment approach. We believe this is a resilient portfolio that can provide sustainable long term returns. Our portfolio value has quadrupled over the last 17 years, excluding any net new capital.
More importantly, Temasek aims to do well, do right, and do good, as an active investor, a forward looking institution, and a trusted steward.
We are a provider of catalytic capital. We deploy financial capital to stimulate innovation and growth; develop human capital to uplift capabilities and enhance potential; enable natural capital to foster sustainable solutions; and seed social capital to transform lives for a more inclusive and resilient world.
An example: various key markets will likely see marginally better returns during the next decade or so if the world chooses to do nothing to abate carbon. However, the trade-off is an unliveable planet within our lifetime, and lower returns beyond the next 15-20 years.
Going for high climate ambition may dent returns marginally for the next 10-15 years, but the payoff is a more liveable planet for all – alongside higher long term returns.
The choice is clear.
Temasek has chosen to lean in on carbon abatement and other goals for planet, people and prosperity.
Divesting emitters, or investing only in low emission businesses, does nothing to speed up the carbon abatement journey or help the planet. That’s why Temasek chooses to work with companies on their carbon transition journey.
More information on Temasek’s performance may be found at temasekreview.com.sg.
Nagi Hamiyeh
Joint Head, Investment Group
Head, Portfolio Development
Temasek
Thursday, July 22, 2021
Temasek happy to suffer lower returns over the next 10-15 years to save Planet Earth, first major institutional investor to admit that decarbonisation will come at a significant cost
by Ganesh Sahathevan
Temasek Managing CEO Nagi Hamiyeh has declared that Temasek is prepared to underperform international benchmarks for the next 10-15 years in order to save Plant Earth.
In a letter to media Hamiyeh said:
More importantly, Temasek aims to do well, do right, and do good, as an active investor, a forward-looking institution and a trusted steward.
Going for high climate ambition may dent returns marginally for the next 10 to 15 years, but the payoff is a more liveable planet for all - alongside higher long-term returns.
The choice is clear. Temasek has chosen to lean in on carbon abatement and other goals for planet, people and prosperity.
Temasek is probably the only major international investor this far which has admitted that an investment strategy driven by decarbonisation will come at a cost, and not provide the excess returns that many claim it would. 10-15 years is a long time in investing terms.Prosperity is not normally measured in perpetuity.
TO BE READ WITH
Letter to the Straits Times: Temasek's portfolio positioned to provide sustainable, long-term returns
21 JUL 2021
We note Mr Alfred Chan Hock Yuen’s comments on Temasek’s performance compared to the MSCI World Index (“Forum: How has Temasek done compared with others?”, The Straits Times, 17 July 2021).
There are various ways of putting money to work.
Theoretically, one could invest all of one’s assets in an index, or hop from index to index for best returns, if one has the foresight and agility to do so.
Temasek could conceivably liquidate all its assets, to become an index investor.
With the MSCI World Index, we would be overweight USA and other developed markets, with less than 10% exposure to the Asian economies; less than half a percent to Singapore.
Temasek has chosen not to do so. Fundamentally, we have confidence in the long term potential of Asia.
At the same time, we have been deliberately reshaping our portfolio towards longer term structural or secular trends like digitisation, sustainable living, the future of consumption, and longer lifespans.
Temasek’s current portfolio is the aggregate result of our bottom-up investment approach. We believe this is a resilient portfolio that can provide sustainable long term returns. Our portfolio value has quadrupled over the last 17 years, excluding any net new capital.
More importantly, Temasek aims to do well, do right, and do good, as an active investor, a forward looking institution, and a trusted steward.
We are a provider of catalytic capital. We deploy financial capital to stimulate innovation and growth; develop human capital to uplift capabilities and enhance potential; enable natural capital to foster sustainable solutions; and seed social capital to transform lives for a more inclusive and resilient world.
An example: various key markets will likely see marginally better returns during the next decade or so if the world chooses to do nothing to abate carbon. However, the trade-off is an unliveable planet within our lifetime, and lower returns beyond the next 15-20 years.
Going for high climate ambition may dent returns marginally for the next 10-15 years, but the payoff is a more liveable planet for all – alongside higher long term returns.
The choice is clear.
Temasek has chosen to lean in on carbon abatement and other goals for planet, people and prosperity.
Divesting emitters, or investing only in low emission businesses, does nothing to speed up the carbon abatement journey or help the planet. That’s why Temasek chooses to work with companies on their carbon transition journey.
More information on Temasek’s performance may be found at temasekreview.com.sg.
Nagi Hamiyeh
Joint Head, Investment Group
Head, Portfolio Development
Temasek