Mapping GIC’s influence in the tech ecosystem

Singapore state-owned investment major Temasek has one common grievance: it’s often referred to as a sovereign wealth fund (SWF).

In charge of managing the city-state’s foreign reserves, GIC (formerly known as the Government of Singapore Corporation) is the country’s actual SWF.

The two entities – often participating in the same investment deals – emerged as 2022’s most active sovereign investors, according to a survey by Global SWF, which tracks investments made by state-owned investors. These include sovereign wealth funds and public pension funds.

This piece demystifies GIC’s investment strategies in the technology space and compares them against Temasek’s investment blueprint.

For starters, while Temasek owns the assets it manages, GIC doesn’t.

The SWF describes itself as a fairly conservative investor compared to Temasek, with most of its bets being in the public markets. It also notes on its website that while Temasek “is exposed to significantly higher risk than GIC,” Temasek has also delivered higher returns over time as expected.

See also: Mapping Temasek’s role in the startup space

That said, GIC does not just have a “savings function but also a stabilization function – as demonstrated during Covid-19 – and therefore they pursue a balanced investment strategy, while keeping an appropriate level of liquidity,” says Diego Lopez, founder and managing director at Global SWF.

For instance, despite the economic uncertainties caused by the pandemic, GIC says its investment stance, which emphasizes diversification and caution, has cushioned its performance from the market correction that occurred in early 2022.

GIC’s mandate is to achieve good long-term returns over global inflation, the primary metric for which is the rolling 20-year real rate of return.

“The goal is expressed in real terms because GIC must, at a minimum, beat global inflation and preserve the international purchasing power of the reserves placed under our management,” a spokesperson tells Tech in Asia.

TIG’s rise, global footprint

Temasek says it has a multipronged approach to investing, which includes launching its own startups and investment firms as well as a venture-building arm.

For GIC, instead of creating an external subsidiary like Temasek, it has the Technology Investment Group (TIG), which invests directly in innovative technology companies and serves as limited partners in venture and growth equity funds.

While GIC has been investing in the technology space since its establishment in 1981, its focus in the beginning was to invest in tech firms that were listed on major stock markets.

When GIC opened an office in San Francisco in 1986, this approach expanded into backing private venture capital funds “earlier than most other institutional investors,” GIC notes in its annual report for 2017 to 2018.

The big bets

Next big thing? No thanks