Jeffrey Siow: Singapore’s Temasek and GIC Returns Meet Government Expectations

In a direct address to Parliament on January 12, 2026, Singapore’s Senior Minister of State for Finance, Jeffrey Siow, firmly stated that the returns generated by the nation’s two colossal state investors, Temasek and GIC, are ‘reasonable and within expectations.’ His remarks came amidst growing public and media scrutiny, including a critical Financial Times article published in December 2025, which questioned the performance of these funds.

The Financial Times, along with data from Global SWF, had suggested that Temasek and GIC’s recent returns ‘compared unfavourably with many global peers,’ even labeling them ‘among the weakest performers among 50 similar global organisations over a 10-year period,’ despite their significant size and resources. This narrative painted a concerning picture, prompting Members of Parliament to seek clarification on the sustainability of Singapore’s financial foundations.

Setting the Record Straight: Context Over Comparison

Mr. Siow, who also serves as Acting Transport Minister, meticulously dismantled the basis of these comparisons. He emphasized that directly pitting GIC and Temasek against other funds, including other sovereign wealth funds, without proper context is fundamentally misleading. ‘Such comparisons should be interpreted in their proper context because different funds operate under different mandates and risk profiles,’ he asserted. This distinction is crucial, as each fund is designed to achieve specific objectives tailored to its unique role within Singapore’s economic framework.

He further underscored the government’s unwavering focus on the long game. ‘Our focus has always been on long-term performance rather than on short-term or year-to-year fluctuations,’ Siow explained, highlighting a patient capital approach that prioritizes sustained growth and resilience over volatile, immediate gains.

GIC: The Guardian of Purchasing Power with a Prudent Hand

GIC, serving as the Government’s fund manager, operates with a clear mandate: to preserve and enhance the international purchasing power of the assets under its management. This mission demands a cautious, long-term perspective. Over the 20 years leading up to March 31, 2025, GIC recorded a real rate of return of 3.8 percent per annum. While this figure might seem modest to some, Mr. Siow clarified that it reflects a strategic choice.

In recent years, GIC proactively took ‘pre-emptive measures to moderate its risk exposure,’ anticipating increased market volatility and heightened valuations. These prudent de-risking measures, such as those implemented during periods of distress like the Covid-19 pandemic, were designed to keep portfolio risks within acceptable limits and guard against significant asset impairment in the event of a sharp market correction. While these actions inevitably resulted in ‘some foregone returns’ as equity markets remained elevated, Siow argued that this was a conscious trade-off. ‘Ultimately, what is more important is the longer-term performance achieved within acceptable risk limits,’ he stated, adding that GIC’s active management enabled it to consistently add value, preserve purchasing power, and deliver returns above global inflation. He entrusted the fund’s professionals, saying, ‘we have to leave the professionals to do the work that they do.’

Temasek: The Dynamic Investor Expanding Global Horizons

Operating on a higher end of the risk spectrum, Temasek functions primarily as an active, bottom-up investor. Its strategy involves investing directly in companies and markets identified for long-term growth potential. Over the last 20-year period, Temasek reported a total shareholder return of 8 percent per annum in US dollar terms, a figure comparable to other sovereign wealth funds with a similar higher risk profile, such as the Canadian pension plan investment board.

Originally established as a holding company for the Government’s local assets, Temasek has significantly broadened its scope, now investing across global markets, though Singapore-based portfolio companies remain a core component. Mr. Siow acknowledged that Temasek’s recent performance had been impacted by the Chinese market, but this was effectively mitigated by stronger returns from its investments in Europe and the United States.

Demonstrating its dynamic approach, Temasek announced in August 2025 a significant restructuring plan to establish three distinct entities. These new segments will manage global direct investments, Singapore-based Temasek portfolio companies, and partnerships, funds, and asset management companies. This strategic shift aims to optimize its investment strategy and governance.

Recent high-profile investments further illustrate Temasek’s active role. On January 12, 2026, the Business Times reported that Temasek, alongside Apollo Global Management, led a substantial US$1.8 billion financing round for QXO, a building products supplier. This latest funding boosted QXO’s total investment to US$3 billion, signaling Temasek’s confidence in the building products consolidation trend. Furthermore, a December 2025 report via Bloomberg and the Business Times revealed Temasek’s decision to take a minority stake in the Italian high-end sneaker producer, Golden Goose Group, as part of a larger buyout debt deal led by major financial institutions.

Safeguarding Singapore’s Financial Stability: NIRC and CPF

Responding to concerns raised by MPs regarding the implications of GIC and Temasek’s performance on the sustainability of Singapore’s net investment returns contribution (NIRC) and the Government’s ability to meet its Central Provident Fund (CPF) liabilities, Mr. Siow offered strong reassurance. He affirmed that the Government is fully capable of meeting all debt-servicing costs and obligations, including committed CPF rates, through the Special Singapore Government Securities (SSGS).

Siow clarified that GIC manages a combined pool of government funds, which includes a significant sum of unencumbered assets, not solely SSGS or CPF monies. This integrated approach grants GIC the flexibility to invest for the long term, thereby securing robust long-term returns. While acknowledging that GIC’s returns could experience short-term lows or even negative periods due to market uncertainty, he stressed the Government’s formidable financial strength. ‘The Government is able to absorb these short-term market fluctuations and risks because it has a strong balance sheet,’ he explained, citing a substantial buffer of net assets that enables it to fulfill its obligations comprehensively.

Government Oversight vs. Investment Autonomy

Mr. Siow also delineated the government’s role in overseeing these entities. While the government ensures Temasek has a competent board to oversee its management, it does not ‘otherwise influence or direct Temasek’s individual investment decisions.’ The government’s mandate for Temasek remains clear: to ‘deliver good, sustainable long-term returns.’ Similarly, for GIC, the government works closely with its board to ensure the mandate is met, particularly in maintaining a conservative approach to preserve the capital base given its risk profile. ‘We think they have met expectations in this regard,’ he commented.

He further clarified that Temasek is not required to pursue specific strategic or economic development strategies; such efforts, like developing industry ecosystems or supporting early-stage start-ups, are led by the Government. Temasek may participate in these initiatives, but it does so strictly on commercial terms. The government also refrains from intervening in Temasek’s restructuring decisions, holding its board accountable for delivering good long-term returns based on net portfolio performance, after all fees and expenses.

Jeffrey Siow’s robust defense underscores Singapore’s deep commitment to a long-term, risk-calibrated investment philosophy. It’s a strategic choice, prioritizing stability and sustainable growth over chasing short-term market highs, a lesson in patient capital that often defies simplistic comparisons and requires a nuanced understanding of mandates and risk profiles.