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Temasek Holdings reorganises to prioritise investment team

6 investment professionals promoted; sector and market investment teams now under a single investment group

28509801 - 03_07_2013 - TEMASEK ANNUAL REPORT.jpg
Temasek Holdings has reorganised its senior management to refocus its investment team to cope with volatile markets.

Singapore

TEMASEK Holdings has reorganised its senior management to refocus its investment team to cope with volatile markets.

The reorganisation which sees the promotion of six investment professionals is a move by Temasek International (TI) chief executive Lee Theng Kiat to refine roles and set priorities. Mr Lee was promoted to his current post last September.

Temasek on Tuesday said its organisation structure change is aimed at aligning the firm with its core priorities in these challenging global times.

"Temasek thinks long term and acts as an owner in all that we do," said Mr Lee. "At a strategic level, the changes we're making position the organisation to protect and work the Temasek portfolio, and continue to build capabilities as we grow."

With effect from May 1, senior managing directors Chia Song Hwee and Dilhan Pillay Sandrasegara will be appointed presidents. And Fidah Alsagoff, Michael Buchanan, Png Chin Yee and Juliet Teo will be promoted to senior managing directors from managing directors.

Mr Lee said that, on the institution front, "we will use the opportunity to further build agility, alignment and accountability, as we continue on our journey to being a high-performing global organisation.

"We continue to preserve a strong partnership culture within our senior leadership team, leveraging our leaders' complementary skillsets."

The changes include bringing together sector and market investment teams under a single investment group headed jointly by Mr Chia and Mr Sandrasegara.

There will also be a new portfolio strategy and risk group to bring an increased focus to the resilience of Temasek's portfolio and better position the group in light of dynamic market conditions; and the creation of a new sustainability and stewardship group, to lead initiatives around the themes of sustainability and stewardship.

The changes will streamline the investment teams which have got somewhat unwieldy, said sources.

The idea is that the "investment professionals' input gets priority and is better reflected", said one source.

"This will realign those who invest, who bring in the bacon", into focus, he said. "Markets are topsy turvy. It's focusing on what's important. Temasek is an investment company, first and foremost," he said.

Temasek's 21 senior managers used to sit on all the management committees including the investment committees, said another source.

Now, the number of the various committees will be whittled down to 10-15, making them more manageable, the second source said.

"We are operating in challenging times, with many uncertainties in the global economy," Mr Lee said. "It highlights to all of us, at Temasek, the need to focus on protecting and working our portfolio, while continuing to build a stronger institution which positions us to meet these current and future challenges."

The reorganisation invariably raises the question of succession planning for when Ho Ching, Temasek Holdings' executive director and CEO, steps down.

Succession planning for leadership positions is a key responsibility of senior management, said Temasek spokesman Stephen Forshaw.

"As part of the succession planning process, we constantly look to develop our executives and to seek talent to complement our senior management bench strength," he said.

He added that the new organisation structure supports the priorities that Mr Lee and his senior team have been developing since he took over as CEO of TI last year.

In his current role, Mr Lee oversees the execution of Temasek's commercial strategies and leads the management team at Temasek, Mr Forshaw said.

"Ho Ching continues to remain engaged in the business, continuing in her dual roles as chairman of Temasek International and CEO of Temasek Holdings, in which she exercises her stewardship and constitutional responsibilities," he added.

Separately, Temasek also announced that Boon Sim, head of Americas, will be leaving Temasek and relinquishing his current executive responsibilities on May 1. He will continue to support as an advisory senior director.

"In his new advisory role, Boon will continue to help us build and strengthen our network in the US, serve on some boards, and also advise us on relevant projects and initiatives," said Mr Forshaw.

Mr Sandrasegara takes over as head, Americas, in addition to his other responsibilities.

Commenting on the changes, National University of Singapore associate professor Mak Yuen Teen said it seems Temasek is consolidating expertise which has heretofore been distributed across the group in investment, risks and stewardship.

"This makes sense to me to maximise the utilisation of the expertise in making decisions in these areas," said Prof Mak, who is also a corporate governance advocate.

Temasek reported a total shareholder return of 19.2 per cent for the year ended March 31, 2015, as its net portfolio value rose S$43 billion to S$266 billion, thanks to a global equity rally. In terms of geographic exposure by underlying assets, Singapore and China were highest at 28 per cent and 27 per cent respectively.

Since then, markets have been choppy and global growth sluggish; the Shanghai Stock Exchange Composite Index is down 33 per cent from a year ago but the S&P 500 is only very slightly lower, down 1.4 per cent over the same period.