West sparks Singapore fund shake-up

Financial Times

The Government of Singapore Investment Corporation, one of the world’s biggest sovereign wealth funds, yesterday announced a senior management shake-up prompted by concerns about protectionism and regulatory change in the west.

GIC, estimated by Deutsche Bank to have assets of about $300bn, said it had appointed Lim Chow Kiat to the new post of president for Europe, based in London, while Anthony Lim Weng Kin would become president for Americas, based in New York.

The new regional heads – both internal appointments – will outrank the regional representatives of GIC’s three investment subsidiaries and will be expected to promote contacts with policy makers and opinion formers as the fall-out from the global financial crisis becomes clearer.

“The appointments come at a time when critical changes will be made to the global financial system, and there is a need for GIC to not only gather but also contribute deeper insights into investment opportunities and challenges in the coming years,” GIC said.

GIC declined to comment further on the appointments. However, Tony Tan, GIC’s deputy chairman and executive director, said in a speech last month that Asian financial institutions faced both “tremendous opportunities” and major challenges in western countries.

“A lack of co-ordination in regulatory architecture and practice, together with the rising global unemployment in coming years, may lead to regional trading and financial blocs or at worst, a retreat to protectionism and nationalism,” he said.

The latest GIC management shake-up follows the appointment in June of Lim Siong Guan, a former head of the Singapore civil service, as GIC group president.

The fund, chaired by Lee Kuan Yew, the former Singapore prime minister, says it intends to remain a long-term investor in western financial groups, in spite of unrealised losses on investments in UBS and Citigroup made at the onset of the financial crisis in late 2007.

Mr Lee said in February that the fund’s value had fallen by 25 per cent from its peak because of the global financial turmoil.

Separately, Moody’s credit ratings agency said yesterday that its ratings outlook for Singapore Power and PSA, the Singapore ports company, would be changed in the event of a material sale of stakes by Temasek, the city state’s other sovereign wealth fund.

Moody’s said a new operating charter unveiled by Temasek last week was consistent with its existing aim of diversifying its holdings, and was factored into its rating. However, its ratings for PSA and Singapore Power benefited from its expectations of support by Temasek.


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