Clarity of mission and decision-making, domestic and regional leadership and a long-term vision are what connects the winners of AsianInvestor’s second annual Institutional Excellence Awards. Introduced to highlight best practice, 17 awards were handed to 16 institutions collectively managing $3.5 trillion.
The winners were announced on October 30 and received their awards at an exclusive ceremony and dinner last night (December 2) at The South Beach hotel in Singapore. Today we explain why GIC has retained the award it won for the sovereign wealth fund category last year.
We thank all those who contributed their thoughts to these awards. The full list of write-ups appears in the December issue of AsianInvestor magazine, and more details of our decision-making process can be found here.
SOVEREIGN WEALTH FUND
In terms of the sophistication of its portfolio construction process and the scope of engagement with internal and external stakeholders, GIC remains the benchmark for the region among Asian sovereigns.
Not content to stand still, Singapore’s flagship global investor has revised its organisational structure, introducing new investment groups and empowering teams to maximise its global opportunity set. As well as the changes made to portfolio construction last year, it has aligned with the trend for separate reference, policy and active portfolios, recently introducing two new investment groups: an integrated strategies group (ISG) and a portfolio execution group (PEG).
ISG can take a more flexible, collaborative approach across public and private markets, developing thematic strategies and complementary product ideas, while PEG was established to facilitate more efficient beta replication in passive portfolio management.
A less centralised structure is apparent at GIC this year from the movement of senior personnel to run operations in New York and London, as it seeks to make the most of its global reach and exceptional peer network.
GIC has always been a thought leader and it continues to promote the key concepts of risk management and long-term portfolio management, while building relationships with external parties, including major corporations and business groups. It is now placing much more emphasis on investing in private companies. This closer collaboration includes co-investing, making introductions and structuring investments, including spinning off companies.
GIC takes the view that an organisation’s entire ‘ecosystem’ must have a long-term mindset for it to work. The minimum time-horizon for performance measurement is five years and it works to prepare expectations for future return paths, offering transparency via composite portfolios and volatility statistics to reflect the level of portfolio risk.
The fact is, other sovereigns look at GIC to see how it is structured and how it operates as a sophisticated and careful global investor with a strong internal governance framework. The Singapore is still the yardstick sovereign wealth fund for the region.
Winners previously unveiled: