Beyond banks: 4 trends guiding Temasek’s financial services portfolio growth
Over the past decade, the S’pore investment firm built resilience and positioned for long-term returns by diversifying its financial services investments
Kareyst Lin
A global pandemic. Entire industries disrupted by technology and artificial intelligence. Geopolitical tensions and trade uncertainties.
What’s next? More unknowns.
But the key to navigating the future, said Connie Chan, head of Financial Services at Temasek, is to build resilience before storms hit.
For the Singapore state investment firm, that resilience has been forged over time through diversification including across its financial services portfolio.
The financial sector occupies one of the largest slices of its portfolio at 22 per cent, alongside transportation and industrials.
“Faced with an everchanging world, (Temasek has) to sense the challenges around us, adapt our strategies,” she said, “and (seek to) thrive by building a forward-looking portfolio.”
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Over the last decade, Temasek has transformed its financial services portfolio.
“Our exposure was initially concentrated in banks in emerging markets (like) China and India,” said Chan. Now, it has diversified to also include companies across insurance, payments, wealth and asset management, as well as financial infrastructure.
This approach has allowed Temasek to “absorb shocks” while staying positioned for long-term growth, she added.
The firm’s overall net portfolio value was S$434 billion as at 31 March 2025, having quadrupled over the last 20 years.
Steering through shifts
Connie Chan, head of Financial Services at Temasek, highlighted four major shifts that have guided, and will continue to guide, the company’s investments in the sector:
- Digitisation and adoption of technology, including artificial intelligence, which have fundamentally transformed customer experiences and drove demand for more modernised IT infrastructures.
- Evolving market dynamics, with developed markets demanding sophisticated investment tools, alternative assets, and tech-enabled solutions. Meanwhile, the growth in emerging markets is being driven by rising incomes and demand for financial inclusion.
- Evolving regulatory frameworks are providing more clarity for areas like digital assets, cybersecurity and data privacy.
- Sustainability is increasingly embedded in financial decision-making, with financial institutions playing a crucial role in driving the transition to a low-carbon economy.
Taking a long-term view
With financial services being a critical enabler across the wider economy, said Chan, “Temasek invests in both established firms modernising their operations and disruptors driving innovation.”
She added: “At the core of our approach is a disciplined evaluation of risk and reward, ensuring we balance value creation opportunities with potential risks.”
One example is Amsterdam-headquartered payment services firm Adyen. Temasek first invested S$50 million in Adyen’s Series B round in 2014, later increasing its stake and staying the course after the company’s initial public offering in 2018.
Today, Adyen is worth over S$70 billion.
Chan noted that sustainability is also integral to Temasek’s broader investment strategy, as it serves as a driver of long-term value creation and portfolio resilience.
Highlighting that sustainable finance is a key enabler of the global climate transition, she explained that green infrastructure projects in Asia often struggle to attract traditional financing due to real or perceived risks in emerging markets, such as unpredictable returns and fluctuating regulatory environments.
In 2022, Temasek and HSBC set up sustainable infrastructure debt financing platform Pentagreen Capital to provide debt financing and reduce the barriers to capital access for marginally bankable projects in South-east Asia.
Since its launch, said Chan, Pentagreen has structured four deals, supporting solar, bioenergy and battery storage projects across South-east Asia and India.
This was produced in partnership with the Monetary Authority of Singapore and the Global Finance & Technology Network.
For more stories, go to https://bt.sg/sff2025
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