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Singapore investment entity begins to open to outsiders
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Singapore--One of Asia's biggest and most secretive investors is officially ending a policy of being a closed book--but that doesn't mean it is opening its books.
The investor in question, the Government of Singapore Investment Corporation Pte.Ltd., has both plenty of capital--it manages more than US$100 billion--and clout--its chairman is Lee Kuan Yew, Singapore's senior minister and the man credited with building this modern Southeast Asian city-state. But much else about GIC, one of the key arms through which prosperous Singapore invests its accumulated wealth, is a mystery. Only a year ago it declined to name its board. Now, as GIC approaches its 20th birthday next month, Mr. Lee says he wants it to open up--not so that taxpayers here can examine GIC's books, but so that GIC can recruit better, and attract the sort of top global talent that gravitates to the world's leading investment banks.
“We learned the hard way that this is a global marketplace, and that we need top-class players,” said Mr. Lee.
His desire to have the best fund managers work for Singapore Inc. says much about his concern with Singapore's global competitiveness. It's a theme he extends well beyond GIC. In an hour-long interview, Mr. Lee grows noticeably animated as he asserts that Singapore companies need a “generational change at the very top” to compete and vows to expose them to more competition locally. Hostile takeovers, he added, are “bound to happen sooner or later and we're not going to stop it if it is in Singapore's interests. There are assets which are not being put to maximum use. Before, they knew we would prevent their being taken over. Now, we'll just let the market decide. That may spur them into action.”
On a scale of one to 10 global competitiveness, he reckoned, local companies “were at two or three” on average. “They have a long way to go.” He later added that, with recent changes, he now ranks them at three to four.
More than a decade after retiring as prime minister, Mr. lee remains a powerful figure. He continually speaks out on a wide range of domestic and global subjects--and the government often follows. Less than five months from his 78th birthday, Mr. Lee looked hale as he spoke at his office at the Istana, the paoatial grounds where Prime Minister Goh Chok Tong and Singapore's president work. Dressed in a pink shirt and green sweater, he showed his opinions haven't mellowed with age.
One of them is that GIC shouldn't disclose detailed financial results. “The returns are adequate,” he said. “We are a special investment fund. The ultimate shareholders are the electorate. It is not in the people's interest, in the nation's interest, to detail our assets and their yearly returns.” The accounts, he added, are checked by Singapore's accountant and auditor-general and other senior officials. “There is total accountability.”
He declined to give more details, other than that the fund takes a cautious stance, with about 40% in equities, 40% in bonds, and 20% in cash and other investments before the Nasdaq Stock market crash this year. He did'nt say how the position changed postcrash.
GIC, currently with a professional investment staff of 221--of whom about 40% are non-Singaporeans--said last year that it is an “active investor”in “over 40 markets world-wide.” It has one unit for real estate and another called GIC Special Investments that puts money into technology start-ups and other companies that aren't publicly traded. Last year, a U.S. communications company announced it was putting broadband capabilities into 74 U.S. office buildings owned by GIC.
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