Temasek eyes team buildout as it expands Europe footprint
Singapore government-owned Temasek is planning to build its investment team at a planned third office in Europe through a mix of relocation and local hiring, a spokesperson said.
The S$403 billion (US$295 billion) investment firm said on November 29 it would open a third office in Europe in Paris, France.
“We are looking to have about 10 investment professionals by 2024,” a spokesperson for Temasek told AsianInvestor. “We will initially relocate our staff from London and other global offices and will hire locally over time.”
Opening the new office in Paris reflects the importance of the Europe, Middle East and Asia region as an investment destination for Temasek, the spokesperson added. Temasek has offices in London and Brussels as well.
The Paris office is expected to be operational in the first half of 2023. The addition will increase the Singaporean company’s global footprint to 13 offices in nine countries.
Foreign offices of sovereign investors reflect the broader relationships between both countries and sheds a light on the significance of current and future investments of the fund in that particular nation or region, said Diego Lopez, managing director of Global SWF, an entity that tracks state-owned investors such as sovereign wealth funds and public pension fund globally.
ATTRACTIVE HEDGE
The current attractiveness of euro-denominated assets as compared to US assets, the diversification from the London office post-Brexit, and from the Brussels office, which is primarily focused on institutional relations, offer good reasons for Temasek to set up a new office in Europe, said Lopez.
Temasek joins other global investors setting up or planning to set up an office in Paris such as Canada’s Caisse de dépôt et placement du Québec (CDPQ) and Ontario Municipal Employees Retirement System, as well as Norway’s Norges Bank Investment Management, Lopez said.
“If we look at those other investors, the focus of the Paris offices has traditionally been real estate and infrastructure in…Europe, although there is an increase in private equity and venture capital activity in France particularly,” he said.
Temasek's portfolio had 33% exposure to the Americas and Europe, Middle East and Africa as of March 31. Financial services and transportation and industries, which includes energy and resources, accounted for 45% of the portfolio by sector.
Temasek invests predominantly in equities globally and is comfortable with minority positions, the firm's spokesperson said.
The state-backed institution, in late 2021, also set up 65 Equity Partners, a firm headquartered in Singapore with investment teams and operations in Europe and the United States focusing on equity and structured equity investments, to help family-owned businesses.
In 2022, state-owned investors opened eight foreign offices, according to Lopez: Public Investment Fund of Saudi Arabia (New York, London, Hong Kong); Ontario Teachers’ Pension Plan (San Francisco, Mumbai); Singapore’s GIC (Sydney); BCI (New York) and Armenian National Interests Fund (Abu Dhabi).
In a post-pandemic world, sovereign wealth funds and public pensions are finding it easier and more important to plant roots around the globe. While Asian institutional investors are setting up offices overseas, global investors are also setting up shop in Asia.
Six offices are already planned for 2023. In addition to Temasek’s third European office in Paris, PIF may open a fourth and fifth office in mainland China and India. Malaysia’s Khazanah will move from San Francisco to New York, while BCI will open a London office. AIMCo, or Alberta Investment Management Corporation, also plans an office in Singapore, Lopez said.