Featured Work, Singapore, Sovereign Wealth Funds - Saturday, August 1, 2009 21:47 - 0 Comments

What now for Temasek?

Euromoney, Op-ed, August 2009

So what now for Temasek? Chip Goodyear’s curious decision to step down from the chief executive role several months before he was even due to commence it raises a number of questions about the direction of Singapore’s state investment arm.

Assessing the impact depends on what you think Goodyear was appointed for in the first place. If it was to bring resources nouse and a change of asset allocation to the sovereign fund, well, that’s actually been underway all year anyway. Temasek has been selling down its western bank exposures, albeit getting out of Bank of America (in which it gained a stake through its Merrill Lynch holding) and Barclays at what history will probably judge as being the worst possible time to do so. And almost every significant recent purchase it has made has been in the resources sector anyway: a stake in the Chinese iron ore producer Lung Ming, and a $303 million purchase of a stake in Olam International, which is mainly involved in soft commodities. Temasek had already set its new asset allocation formula, with 10% of the portfolio in emerging markets such as Latin America and Africa alongside 20% in developed markets, 30% in Singapore and 40% in Asia, before the change of CEO was announced. Sure, Goodyear would have been helpful to find the right energy assets, but this policy can be rolled out without him. Continue…

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