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Temasek Holdings continue to be "positive" on the long-term trajectory of Chinese markets, Dilhan Pillay Sandrasegara, the state investor's deputy CEO said.

Investment decisions directed by larger, long-term trends

Speaking at a briefing held by the state investor on Tuesday, Feb. 9, Dilhan was responding to a media query on Temasek's future strategy, in light of China being its largest portfolio, and recent events such as the Chinese government's crackdown on tech giant Alibaba.

China accounts for the bulk of Temasek's investments (29 per cent) as of the end of March 31, 2020, followed by Singapore (24 per cent).

Dilhan, who will be taking over current CEO Ho Ching's position when she steps down on Oct. 1, explained that everything Temasek does is to ensure long-term success, which means their strategy is not deployed on a year-by-year basis.

And for over a decade, they have been figuring out the kind of portfolio they would like to own 10 and 20 years down the road, he said, adding that their reasoning behind investments is not limited to any particular company.

Even before he joined Temasek in 2010, he said that China has always had that long-term potential for the government-owned investment company.

This can be seen in the way consumption spending is evolving in China, as well as the emergence of strong domestic brands in China, he elaborated.

He added that Temasek typically invests in areas where they see these sort of trends, not just today but for the future as well.

Investments in China have paid off, just like investments in the U.S.

Dilhan also highlighted that Temasek first invested in China's financial services as it was a window to the country's future, and as a proxy for the opening up of China.

The decision proved to be the right one as such investments have paid off, he said, adding that subsequent investments were made in Internet-related firms, such as Alibaba and Tencent and other ventures.

As they now see China emerging in the areas of biotech and domestic consumer brands, Dilhan said there is always opportunity in China.

Similar to how they see investments elsewhere like in the United States, he explained that when Temasek looks at china, they look at the country's long-term prospects.

He added that being "patient investors", Temasek is "very clear" on trends, and the corresponding strategies they need to employ in order to make the right investments and wait for their harvest.

Nevertheless, he said the investment firm recognises that the world today is much more complex, which is why moving forward, they would be "mindful" and think broadly about all other considerations when making their decisions.

Ho Ching further clarified that as of last year, they had not deliberately made China the biggest market, and that it simply became that way as "the markets in China came up and markets in Singapore went down".

Therefore, rather than making China the target country, it was just "a function of where the market was at that point in time", she said.

Ho added that they make their investments based on various factors, such as the idea of growth versus stability, and where they see the trends are, which include disruptive innovations in areas such as life sciences.

Top image via Temasek Holdings