Temasek keeps 25% of portfolio liquid to weather shocks and seize trends, CIO says

Singapore state investor Temasek will keep 25% of its portfolio, or about $100 billion, in liquid assets to ride through shocks and pivot with changing trends including AI, its Chief Investment Officer said. "That liquidity allows you to ride through shocks, and there will be many ‌shocks, but ⁠also ⁠allows you to pivot with changing trends," Rohit Sipahimalani told the Reuters NEXT Asia event in Singapore on Thursday. Temasek reported on Wednesday its highest-ever net portfolio value of S$518 billion ($400 billion), helped by gains in listed Singapore companies and asset sales.

Temasek also aimed to lift its exposure to artificial intelligence companies to as much as 15% ​of its portfolio over the next five years ⁠from 6% ‌now.

Sipahimalani said Temasek has also increased its exposure to businesses ​that are ​more around hard assets that are likely to be less ⁠disrupted by AI.


"So infrastructure (and) commodities, which are likely ​to be less disrupted by AI," he said.

Meanwhile, he sees ​private credit as an asset class that has done well in volatile markets.

"When we look under the hood, we don't see any major structural problems in the market," he said. "The other interesting thing is that with higher base rates, you are also protected against inflation, which is a ‌tricky risk out there," he said, adding that he expects the asset class to yield double-digit returns.


Temasek said on Wednesday it ​would aim ​to increase its allocation to ⁠private credit to 5% by 2031, from 2% currently. As for private equity, Sipahimalani expects the difference between private equity and private credit returns to fall ​to about 100 to 150 basis points, from 500 basis points.


"From a risk return perspective, you can understand why more people are moving to private credit," he said. View the live broadcast of the World Stage and read full coverage of the summit here.