GIC giving PE firms a run for their money by investing directly

[SINGAPORE] Singapore's GIC is taking the unusual step of investing directly in unlisted firms - a move bankers say will be mimicked by other sovereign wealth funds as low yields spur fund managers to adopt a more hands-on attitude in their search for higher returns.

In the first half of this year, GIC agreed to pay up to US$310 million for minority stakes in two unlisted Philippine companies: food producer Century Canning Corp, and hospital group Metro Pacific Investment Corp.

While the investments in the South-east Asian archipelago nation formed just a tiny sliver of GIC's estimated US$30 billion private equity (PE) portfolio, they marked a departure from GIC's approach of putting money in a private equity fund that would then invest on its behalf, or co-investing with a buyout firm.