Temasek Holdings, the Singapore government investment vehicle, has hired former Morgan Stanley banker Michael Dee as its senior managing director for international investments.

Dee has been on board since the start of August and is part of a team that focuses on international allocations.

Dee has returned to Singapore from Morgan Stanley in Houston where he was based as a regional head for investment banking. Prior to that, he was based in Singapore as Morgan StanleyÆs CEO for Southeast Asia from 2001 to 2004.

The move to expand Temasek's overseas exposure is seen as a bid to improve both its bottom-line and the overall performance of its investments. Temasek posted a total group profit of S$12.98 billion ($9.27 billion) in the fiscal year ended March 2008, up 42% from S$9.11 billion ($6.5 billion) in the previous fiscal year. But its total shareholder return dipped to 25% in March 2008 from 27% in March 2007.

Temasek, which manages more than $100 billion in assets mainly in Asia, has reduced its holdings in Singapore û in March 44% of its investments were in its home country compared to 38% at the same time a year ago. In contrast, it increased its holdings in the rest of Asia ex-Japan from 34% to 40% this year. It kept its allocation to OECD economies at 20% and other markets at 2%.

The bulk of the new Asian investments are in North Asia û specifically China, Taiwan and Korea û where Temasek increased its holdings to 24% in March from 19% in the same period a year ago. It raised its holdings in South Asia û specifically India and Pakistan û to 4% from 3% in the same period. It held its holdings in Asean ex-Singapore at 12%.

TemasekÆs top sector allocations are financial services (38% of the portfolio), telecommunications and media (23%), and transportation and logistics (12%). Outside Singapore, it has significant investments in Merrill Lynch, Standard Chartered, and PT Bank Danamon Indonesia.