Don’t just pump money – Temasek’s portfolio firms, markets must create inherent value: Teo Chee Hean

[SINGAPORE] From time to time, Temasek faces criticism for being “too dominant” in Singapore’s stock exchange, and that – according to chairman Teo Chee Hean – is something the investment company has to contend with.

In a wide-ranging interview on Tuesday (Jun 2), he was asked if Temasek could play a larger role in the local stock market, given the government’s recent measures to boost liquidity and lure investors back in a big way.

He also gave his take on whether Temasek – whose net portfolio value reached a record high of S$434 billion as at Mar 31, 2025 – could do more to nurture Singapore firms and bring them to market here.

“We do look for good companies, and we do invest in good local companies as well,” said the 71-year-old former Cabinet minister who became Temasek’s fifth chairman last October.

“One has to decide what you want Temasek to do. Sometimes, people sort of point the finger at us and say our (portfolio) companies (make up) such a large proportion of the stock market already. So you have to decide whether you want us to do more or not, but we will contribute to the Singapore economy in a variety of ways.”

He noted that all of Temasek’s portfolio companies have their own boards and management that make their own decisions, whether the companies are listed or not.

“The relationship which Temasek has with them is as a shareholder. We provide them with inputs and the insights that we see as a whole. We invest in them when needed, and we co-invest with them when they invest,” said Teo.

He added that one of Temasek’s segments, which is involved in raising and managing funds, works together with the Singapore Exchange (SGX).

Above all, Teo stressed, Temasek’s portfolio companies and the stock exchange must both offer and create inherent value.

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“You cannot just pump it up by putting more money in if that inherent value is not there. I’m glad to see that that is the approach which SGX has been taking. They are able to find companies which have inherent value, offer good value, and help them to promote themselves in a way which will attract investments,” he said.

“(This) also positions the exchange itself to be more attractive for companies which are able to create value to want to list on the exchange.”

Be the disruptors, not the disrupted

With growing concerns about how artificial intelligence has led to job losses and restructuring, Teo was asked how Temasek balances the need to generate returns with being responsible to society and over people’s livelihoods.

He shared that, earlier this year, Temasek took the chief executive officers of its portfolio companies to spend a week in Silicon Valley to visit some of the AI companies there, as well as firms looking for applications in AI.

“This was (for them to) have a look at what is happening in one of the heartlands where AI is being developed, and to see how they can adapt their companies and strategies, to take this into account so that they will be the ones who are the disruptors – and not the disrupted,” he noted.

Giving the portfolio companies a better understanding lets them prepare the workforce for the challenges ahead too, he added.

“This is an opportunity not just for the companies, but for the workforce to learn new skills, be more productive, more effective, and contribute more.”

“Reasonable balance” between growth and resilience

A little more than a month after he joined the board, Temasek announced that it would undergo restructuring and set up separate entities to manage three distinct portfolio segments.

These are global direct investments; Singapore-based Temasek portfolio companies; and partnerships, funds and asset management companies.

The split is roughly 40 per cent, 40 per cent and 20 per cent, respectively, which is how Temasek’s assets are distributed currently.

“This gives us the ability to focus more sharply in each of these segments of our portfolio. It allows them to develop and grow in their own way, to create the most value for Temasek and for Singapore,” said Teo, adding that there had to be a “reasonable balance” between growth and resilience.

As for whether the turbulent global environment had affected Temasek’s succession planning, the chairman said that the restructuring has provided opportunities for senior officers to develop their leadership skills.

“Some of the decision-making and investments have been decentralised to these groups. They will have greater ability to make decisions within the groups and have more responsiveness and flexibility. Because as the markets change, they can decide and act more quickly and responsively,” he said.

Putting boots on the ground

During his first year as Temasek chairman, Teo has visited all of the company’s overseas offices, including in Beijing, London, New York and San Francisco.

He said that these offices are important as they give the executives based there a better sense of what is happening on the ground.

“We have good people in each of these offices. They know the markets they operate in well. You cannot operate this kind of thing remotely just from Singapore and just reading (about) what’s happening. You actually have to be in the market to make sensible recommendations and decisions, and so we have good people in each of them.”

Asked by The Business Times if there were plans to add a new location to that list at some point, Teo said there is some scope for this.

“We do not have an office, for example, right now in the Middle East, and we are actively looking at that and finding the right time to do so,” he said.

“(But) it is not just for geographical spread, (and) it is not just so that it looks nice on the map. It (has to be a) place in which we think that there are opportunities which we want to place our investments in.”