Temasek, the largest sovereign wealth fund active in India has changed its global charter which emphasises its mission “to create and deliver sustainable long-term returns for our stakeholders”. The charter, which was first made public in 2002, stated earlier that the Singapore government — through Temasek — needed to own and control firms deemed critical to the city-state’s security, economic well-being or public policy objectives. This earlier note has been struck off in the revised charter.
Analysts view this as Temasek downplaying its links to government policy or strategic interests, as it eyes more overseas assets.
Temasek chairman, S Dhanabalan, said, “Temasek’s mission remains to create and deliver sustainable long-term returns for our stakeholders. We have refined our Charter to more clearly articulate our focus as a value-oriented investor, and also as a shareholder focused on achieving sustainable returns by engaging with the boards and management of our portfolio companies. We will continue to review our Temasek Charter regularly, and update it as needed in consultation with our shareholder, to ensure that it remains relevant to our current activities and aspirations as an institution.”
Over the years, as Asia evolved, Temasek’s underlying exposure outside Singapore has gone up. Currently, two-thirds of Temasek’s underlying portfolio is outside Singapore, as compared with a predominantly Singapore portfolio seven years ago. Even today Temasek holds controlling stakes in many bluechip local firms such as Singapore Airlines, but has built overseas exposure.
Some of the Indian firms where it has invested include Bharti Airtel, Tata Sky, Bharti Infratel and ICICI Bank. Temasek had last year faced sharp drop in portfolio value as it sold shares of Bank of America(which it got after the merger with Merrill Lynch where Temasek originally invested) and Barclays. But Temasek CEO Ho Ching has reiterated that the fund house will still consider picking stake in Western financial sector firms.
The updated charter has however maintained status quo on the Singapore President’s approval for the appointment or removal of Temasek’s board members and CEO. Temasek is looking for a successor to Ho after designated successor Chip Goodyear, a former BHP Billiton CEO, unexpectedly resigned last month, reportedly, over differences in strategy.