Temasek Reports Record Net Portfolio Value of S$382 Billion, Outperforming Global Market Challenges and Embracing Sustainable Growth
Temasek reported a Net Portfolio Value (NPV) of S$382 billion and a net cash position for the financial year ended 31 March 2023. Our NPV was 1.8 times the value of our portfolio a decade ago. Despite challenging global market conditions, our Singapore portfolio companies remained strong while our global direct investments saw some losses, particularly in the technology, healthcare, and payments sectors. Overall, our portfolio has recovered from the lows during the COVID-19 pandemic, with a three-year Total Shareholder Return (TSR) of 8%. Since our inception in 1974, our TSR has remained robust at 14%, with 9% and 6% for the 20-year and 10-year TSRs respectively.The past year has been marked by persistent inflation and rising geopolitical tensions, including conflicts between the US and China, as well as Russia and Ukraine. These events have increased the cost of capital and affected capital flows, as well as the pace of energy transition.
Temasek’s Chairman, Mr Lim Boon Heng, emphasized the importance of businesses and governments taking an active role in addressing global challenges. Our Purpose, “So Every Generation Prospers,” guides our efforts to create a better, more inclusive, and sustainable world.
Looking ahead, Mr Dilhan Pillay, CEO of Temasek, highlighted the challenges posed by higher interest rates, geopolitical tensions, and shifting global dynamics. He emphasized the urgency of addressing climate change and the need for sustainable and inclusive growth.
To address these challenges, Temasek has developed a 10-year roadmap called the T2030 strategy. This strategy focuses on building a resilient portfolio, embedding sustainability, developing future-centric capabilities, and nurturing the organization and team. Our aim is to deliver sustainable value over the long term and provide catalytic capital across financial, human, social, and natural domains.
During the year, Temasek slowed down its investment pace due to global uncertainties, investing S$31 billion and divesting S$27 billion. Our portfolio remains anchored in Asia, with Singapore, China, and the Americas as our top markets. We also plan to open a new office in Paris to expand our global presence.
In terms of specific investments, Temasek has engaged our Singapore portfolio companies in transformation journeys for long-term value. We have also made strategic investments in companies with growth potential in China and India.
In India, we have strengthened our technology, consumer, and financial services portfolio through increased stakes in existing companies and investments in market leaders and emerging categories. In Southeast Asia, we have invested in Oatside, Vietcombank, and Waresix. In North America, new investments have been made in Stripe, Kaseya, and Mastronardi, while in Europe, investments have been made in EuroGroup Laminations and Element Materials Technology.
The Transportation & Industrials and Financial Services sectors continue to be our largest sectors. Our exposure to Transportation & Industrials has increased, while exposure to Financial Services has declined.
Temasek’s portfolio is guided by long-term structural trends such as Digitisation, Sustainable Living, Future of Consumption, and Longer Lifespans. The portfolio’s exposure to these trends has steadily increased from 13% in 2016 to 31% in 2023.
Temasek manages its leverage, liquidity, and balance sheet prudently. Our interest expense for the year was about 5% of the dividend income, and our debt outstanding represents 6% of the NPV and 21% of the liquid assets.
Looking ahead, we maintain a cautious investment stance due to the challenging macroeconomic environment, but we are prepared to increase investments with our strong liquidity position. We will focus on opportunities that align with our long-term structural trends.
Sustainability is a priority for Temasek. We recognize the impact of climate change on our portfolio and are taking urgent action. We are committed to carbon neutrality, reducing our environmental impact, and accelerating global decarbonization. We evaluate environmental, social, and governance factors in our investment decisions and expect our portfolio companies to practice good corporate governance and ethics.
Temasek has three pathways to achieve our sustainability goals. We invest in climate-aligned opportunities, enable carbon-negative solutions, and encourage decarbonization efforts in businesses. We focus on sectors such as food, water, waste, energy, clean transportation, and the built environment. We also support underserved communities and promote impact investing in Asia.
Temasek’s specialized capabilities in AI, Blockchain, Cybersecurity, Data & Digital, and Sustainable Solutions differentiate us as a value-adding investor and shareholder.
We contribute to the progress, cohesion, and resilience of communities through our philanthropic efforts. Our philanthropic funds support community initiatives and have impacted millions of lives. We also prioritize employment opportunities for individuals with autism in skilled engineering jobs.
Overall, Temasek remains committed to our T2030 strategy, striving to do well, do right, and do good, and to help every generation prosper.
