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Temasek, one of the world’s largest sovereign wealth funds, saw its south Asian portfolio, which mostly comprises Indian investments, grow to 7 per cent of the total in 2009 from 1 per cent in 2004. The value of its south Asian portfolio stood at $6.4 billion (on March 31, 2009). The fund is controlled by the government of Singapore.
While its net portfolio value plunged 30 per cent year-on-year (from $130 billion in March 2008 to $91 billion in March 2009) owing to the global financial crisis, it recouped most of its losses by gaining 32 per cent between March and July this year.
The group net profit fell 66 per cent to $4.2 billion from $12.6 billion during the preceding financial year.The drop was due to lower contributions from its portfolio companies as well as investment activities.
During the year ended March 31, 2009, Temasek invested $6.33 billion globally and divested $11.2 billion. In India, it pumped in fresh capital into companies such as Fullerton India and Tata Sky.
The fund posted negative shareholder returns of 30 per cent by market value and -18 per cent by shareholder funds. It has posted 16 per cent returns by both market value and shareholder funds since inception.
“The depreciation in our portfolio value will also lead to a clawaback of deferred compensation to employees,” said Temasek in its annual review. Temasek’s notable investments in India include Tata Teleservices, Mahindra & Mahindra, ICICI Bank, Bharti Airtel and Gateway Distriparks. The deal sizes have ranged from less than $100 million to $2 billion.
Manish Kejriwal, senior managing director, investment, international & India, said, “Within Asia, India continues to be one of our key investment destinations and we strongly believe that India is structurally resilient as an economy given its low exposure to exports, strong corporate balance sheets, low external debt and a resilient banking system. The economy has so far resisted the shock from the global financial crisis and a stable, decisive government may lead to a phase of growth”.
A majority of Temasek’s investments are in financial services (33 per cent), followed by telecom & media (26 per cent). Its other priority sectors include transportation and logistics, energy & resources, infrastructure, and real estate. “We believe that opportunities in the Indian infrastructure space and the domestic consumption-driven businesses are significant and will lead to emergence of champions that are excellent proxies for economic growth,” said Kejriwal.