Singapore sovereign wealth fund GIC reports worst 20-year annual results

Singapore’s sovereign wealth fund GIC has seen a bleak year due to the pandemic

Earlier in 2019, VIR reported that GIC completed purchasing 94.4 milion new shares and now owns a 2.55 per cent stake in Vietcombank – one of Vietnam’s largest state-owned lenders, while Japanese financial corporation Mizuho maintained a 15 per cent stake in the bank.

Last year, the firm also committed to propose investment deals of $100 million to catapult VNLIFE – the parent firm of VNPAY – into the league of unicorn startups.

GIC had diversified its investments in Vietnam, with its prominent portfolio including FPT, Vinhomes, and Masan, among others.

Specifically, GIC recorded its return in two decades of 2.7 per cent – down from 3.4 per cent compared to its last year performance, and also the worst result since 2009 when it lost over one-fifth of its value in one year. According to Bloomberg, the fund blamed this on the dot-com bubble of the late 1990s, which felt out of its rolling 20 years investment window caused most of the decline, rather than COVID-19 turmoil.

“The timing and shape of the recovery is highly unclear, partly because of the infection rate. The economy continues to face a lot of headwinds,” said GIC chief executive officer Lim Chow Kiat.

He also added that the slowdown of globalisation and impact from government stimulus measures were all complicating factors.

GIC’s nominal annualised return over a five-year period also fell to 3.9 per cent, versus 4.9 per cent last year.

Turbulences in global markets stemmed from the public health challenges are forcing the Singapore sovereign wealth fund to re-evaluate its portfolios.

Notably, GIC appears to be one of the world’s largest property investors, and real estate is the most crucial element of its investment focus. While logistics and data centres remain solid prospects, group chief investment officer Jeffrey Jaensubhakij said GIC is reviewing the long-term fortunes of more vulnerable segments, according to Bloomberg.

Established in 1981 to manage Singapore’s foreign reserves, GIC is a global long-term investor with well over $100 billion in assets in over 40 countries worldwide, including Vietnam.