Temasek's net portfolio value bounces back to S$389 billion in 2024 following drop last year

Singapore's state investment arm Temasek Holdings saw growth in 2024 following a drop last year.

Temasek closed its financial year on Mar. 31 and announced the results of its annual review on Jul. 9.

It reported a net portfolio value of S$389 billion, up S$7 billion from 2023.

The increase was mainly due to investment returns from the U.S, and India, the company reported, despite the underperformance of China’s capital markets.

Mark-to-market net portfolio value

This year’s annual review saw Temasek presenting its mark-to-market (MTM) net portfolio value using a refined methodology in order to be consistent with market practice.

The practice of mark-to-market accounting aims to present the fair value of assets and liabilities based on market prices, rather than their book values.

Temasek said it looks at information such as the investee company’s recent funding round and market multiples of comparable public companies under a "market approach", and may also adopt an "income approach" such as the discounted cash flow model to arrive at its MTM net portfolio value.

Temasek said it has been disclosing its MTM net portfolio value since 2022, which facilitates comparison with its peers who also use MTM.

Temasek's MTM net portfolio value for 2024 is S$420 billion, up S$9 billion from last year’s MTM net portfolio value.

Temasek also said its unlisted portfolio has generated 9 per cent returns per annum over the last decade, higher than its overall portfolio.

Their proportion of unlisted assets in Temasek's portfolio has grown steadily from 20 per cent in 2004 to 52 per cent in 2024, the firm reported.

This means that more than half of its portfolio comprises unlisted assets.

“With this increase in exposure, reporting our unlisted assets at mark-to-market value would be more in line with our peers," said Temasek.

The company's one-year Total Shareholder Return (TSR) was 2 per cent, up from negative 5 per cent last year.

Their long-term returns remained stable, with the 20-year and 10-year TSR at 7 per cent and 6 per cent, respectively.

Active investment year

Amidst global economic uncertainties, Temasek said it has maintained a "cautious but steady investment pace".

The company invested S$26 billion into sectors such as technology, financial services, sustainability, consumer, and healthcare in 2024.

Meanwhile, they divested S$33 billion, of which S$10 billion was due to repayment of bonds by Singapore Airlines, as well as the redemption of preference shares by Pavilion Energy.

Excluding Singapore, the U.S. continued to be the leading destination for Temasek’s capital, followed by India and Europe.

The firm has also stepped up investment activities in Japan.

Their performance over the decade was lifted by higher returns from the U.S. and India, although returns have been impacted by China’s market performance in the past few years.

Temasek said it's overall portfolio exposure "remains anchored in Asia".

Outlook for the year ahead

The global economy has been more robust than expected, the firm said.

Despite the better growth outlook, there are still risks, with geopolitical tensions remaining a key concern.

The firm will continue looking at the U.S. as the largest destination for their capital.

It also sees opportunities in Europe, and will look to increase exposure in India, Japan and Southeast Asia.

As for China, they will be maintaining a cautious approach and will continue to monitor government policies this year.

In the near term, the company sees opportunities in private credit and in providing solutions for private equity firms seeking liquidity.

Commemorating 50th anniversary

The firm also commemorated their 50th anniversary this year.

In June 2024, they announced “T-Spring”, a S$150 million gift to the community to advance capabilities and help prepare Singapore’s workforce and organisations for the future.

The gift supports skills development, scholarships, and fellowships.

Lim Boon Heng, chairman of Temasek Holdings commented:

“Since our inception in 1974, Temasek has transformed from a Singapore holding company into a global investment company. As we learn from our past, we look ahead to the future with courage and conviction. We aspire to do well, do right, and do good for current and future generations, always with tomorrow in mind.”

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Top photo by Mothership