GIC chief: Emerging markets make up over 20% of portfolio
Singapore's sovereign wealth fund GIC has significant exposure to emerging markets and views them as positive contributors to long-term real returns, or net returns above global inflation, said its chief executive Lim Chow Kiat.
At the fifth anniversary celebration of GIC's Brazil office on Thursday last week , he highlighted the opportunities that emerging markets offered, adding that they made up over 20 per cent of GIC's portfolio.
This was higher than most global investors, said Mr Lim.
GIC has investments in more than 40 countries and has been investing in emerging markets for more than two decades. It manages a diverse portfolio of foreign assets in excess of US$100 billion (S$135 billion).
Outlining its strategy in a time of uncertainty in the global investment environment, Mr Lim said: "We simply cannot expect broad market exposures to give us the same levels of historical returns.
"We need to supplement with alphas, or idiosyncratic exposures, but do so cautiously and only in areas where we can commit to building capabilities," he told a forum in Sao Paulo.
GIC's office in Sao Paulo was an example of that, he said. Despite the challenging environment in Brazil over the past five years, GIC did not just stay on - it expanded its capabilities and partnerships.
But GIC remains concerned about global uncertainties, said Mr Lim, especially "given elevated market valuations and low volatility" in developed markets.
"The potential reward for risk-taking is not particularly favourable," he added.
Key issues included China's slowdown, a flare-up in geopolitical conflicts and inflation, which is rising faster than expected. - THE STRAITS TIMES
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