Temasek Starts Global Investment Company Seatown, Names Ong CEO
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Temasek Starts Global Investment Company Seatown, Names Ong CEO
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By Netty Ismail and Bei Hu
Feb. 10 (Bloomberg) --
Temasek Holdings Pte has set up a wholly owned global investment company run by its chief strategist
Charles Ong that will employ a variety of strategies investing in assets ranging from stocks to bonds.
Seatown Holdings Pte, which may manage billions of dollars, will target absolute returns, three people with knowledge of its plan said earlier, asking not to be identified because the information is private.
Temasek, which managed S$172 billion ($121 billion) as of July 31, has transformed from a passive holder of stakes in government-controlled companies to an investor with more than two-thirds of its underlying assets abroad. Chief Executive Officer Ho Ching said in July Singapore’s state investment firm may invite the public to co-invest and seek “sophisticated investors” and retail investors within a decade.
“Hedge funds give them a lot of flexibility in terms of the investment strategies,” said
Melvyn Teo, a director at the BNP Paribas Hedge Fund Centre at Singapore Management University. “This would definitely boost returns if they can earn fees and at the same time deliver good returns to investors and to themselves.”
Seatown is a global investment company wholly owned by Temasek, Ong said in an e-mailed statement today, without giving further details.
Temasek already has a fund-management unit,
Fullerton Fund Management Co., which invests in hedge funds and other assets such as equities and bonds.
Fullerton
The sovereign wealth fund, which may be trying to attract and retain talent, “might have known more about hedge funds from their experience” with Fullerton, Teo said.
The size of the hedge fund may be $3 billion, AsianInvestor reported on its Web site earlier today, without saying where it got the information.
Nasser Ahmad, co-founder of New York-based DiMaio Ahmad Capital LLC, a hedge-fund firm specializing in credit products, will be Seatown’s co-CEO and
Margaret Lui will be chief operating officer.
“We have a small core team seconded from Temasek, and are still in the process of building up the Seatown team,”
Jeffrey Fang, a spokesman at Temasek, said in a statement. He declined to provide more details about the new investment company.
Temasek is “exploring the feasibility of creating one more group of stakeholders” by inviting the public to co-invest, Ho said in July. Before doing this, Temasek would first pilot the relevant structures and “rules of engagement” between the state-owned investment company and other sophisticated investors, she said.
Profit Drop
The company has had an annual return of 16 percent since its inception in 1974, according to its annual report in September, down from 18 percent annualized it reported in August 2008.
Its net income fell a record 66 percent to S$6.2 billion in the 12 months ended March 31, 2009, as a collapse in credit markets drove down the value of its stakes in Bank of America Corp. and Barclays Plc. The value of investments, which plunged S$55 billion in the period, rebounded to S$172 billion as of July 31.
Ong joined Temasek in 2002 from Deutsche Bank AG. He started his career as an investment banker with Lazard Freres & Co., according to Temasek’s Web site.
Temasek, which means sea-town in Javanese, is an ancient name of Singapore dating from the 15th century.
Biggest Holder
Temasek, set up to foster the development of Singapore’s banks, airlines and ports, is the biggest shareholder in five of Singapore’s 10 biggest publicly traded companies by market value including Singapore Telecommunications Ltd., Southeast Asia’s biggest phone company, and DBS, the region’s largest bank by assets.
Hedge funds had their best annual performance in six years in 2009. The Eurekahedge Hedge Fund Index, tracking more than 2,000 funds, rose 19 percent in 2009, according to Eurekahedge Pte, a Singapore-based research firm. The annual return was the highest since 2003, when the index rose 21 percent.
Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on their falling as well as rising values and participate substantially in profits from money invested.
To contact the reporter on this story:
Netty Ismail in Singapore
[email protected].
Last Updated: February 10, 2010 02:03 EST
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