Temasek to widen investing horizon

TEMASEK Holdings will start looking at building and grooming promising companies or even establishing new ones as it seeks to boost returns.

The investment giant, which had a portfolio of $198 billion as at March 31 last year, has previously invested in global players such as Spanish oil giant Repsol and Chinese bank Bank of China, but it wants to expand its investing horizon.

While its main business will still involve investing in such companies, it is devoting some resources to digging out hidden opportunities in the market, said Mr Chia Song Hwee, head of Temasek's Investment Group.

"We may be taking a business and growing it in terms of making sure that the full potential of the company is developed. Or we may start something totally new," he said.

Mr Chia outlined Temasek's major strategies and its view of the global economy during an hour-long interview with The Straits Times at the investment firm's office in The Atrium@Orchard.

He said the new strategic thrust will be driven by the Enterprise Development Group, which was created in February with Mr Dilhan Sandrasegara, Temasek's head of Singapore and co-head of portfolio management, at the helm.

Mr Chia said one reason for setting up the separate group was to ensure that Temasek has a dedicated team that can focus on new opportunities in the market.

The other reason was to generate "alpha" - extra value for its capital - said Ms Juliet Teo, Temasek's managing director for investments.

"We are trying to see if we can add value by nurturing companies and growing them into national, regional or global icons," she said,

The new group has three units under it. One is Heliconia Capital management, which looks at small and promising Singapore companies to fund and grow.

It started operations in 2010, and has invested in companies such as Mencast, a local oil and gas engineering firm.

Pavilion Energy, which begins operating in September, will invest in energy and natural gas-related businesses.

The third is Clifford Capital, which finances large overseas infrastructure projects. It started last year with an initial investment of $1 billion.

The new Enterprise Development Group will be looking for companies that are already operating and have a strong revenue stream and customer base, but need that extra boost, said Mr Chia.

And unlike some private equity firms that take an active interest in managing the companies they invest in, Temasek will treat each firm in the new venture the same as in its portfolio companies and also allow the company's management a free hand.

Mr Chia also tackled the question of the need to build a Singapore core of talent, an issue that has sparked heated debate, especially in the financial industry.

He said Temasek will always be a Singapore firm, with its roots firmly planted here, but it is a global investor and must remain open to talent everywhere.

"We obviously like to hire the best people," he said, noting that the company has a good mix of local and foreign talent.

"It is not realistic to box ourselves in and say we want only a certain type of mix because that will hold us back."

aaronl@sph.com.sg

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