How Temasek keeps its distance while working with boards

SINCE it began its approach of greater engagement with its portfolio companies, Temasek has seen a value uplift “north of S$10 billion”.

Some of the corporate action that generated this uplift were:

• CapitaLand’s acquisition of real estate group Ascendas-Singbridge in 2019, and its subsequent restructuring into a listed real estate investment manager and a privately held real estate developer in 2021;
• A capital raising exercise for Singapore Airlines in 2020, to strengthen the airline’s balance sheet and prepare it for a reopening of borders following the pandemic;
• The Sembcorp Industries demerger from Sembcorp Marine in 2020, to focus on opportunities from the energy transition; and
• Keppel ’s divestment of its offshore and marine operations in 2022, and its new focus on asset management.

Some of these moves have met with significant success. Sembcorp’s decision to shed its underperforming marine business, and to focus on the transition from brown to green energy, has created total returns of 69.6 per cent for shareholders (on an annualised basis since the announcement in June 2020).