Singapore’s GIC emerged as the most active state-owned investor globally in 2020 amid unprecedented disruptions to economic activity worldwide.
This is according to Global SWF, which tracks investments made by state-owned investors, including sovereign wealth funds and public pension funds.
GIC retained its most active position for the second consecutive year. The state-owned investor deployed $17.7 billion last year, down from $24 billion a year before. CPP took the second place as the next most-active investor, investing $15 billion in 2020.
During the year, investors were particularly keen on assets in sectors such as information technology and biotech; Global SWF observed that in terms of direct investments into technology businesses, there was a “sharp pivot away” from fintech.
On the other hand, interest in e-commerce, particularly in emerging markets such as India, was driven by retail digitalisation boosted by pandemic-caused movement restrictions.
Temasek Holdings emerged as the top tech investor, ploughing $2.3 billion into investments, particularly in industries such as e-commerce, and healthcare, and biotechnology.
During the year, Temasek made at least 18 investments in healthcare, pharmaceutical, and biotechnology companies in the United States, China, France, Germany, and Singapore.
Among the notable deals during the year was Temasek leading a $250 million private placement in German biotechnology company BioNTech, which together with pharmaceutical company Pfizer developed the first COVID-19 vaccine to be approved by authorities globally.
Temasek was also a major investor in India’s Zomato, adding $62 million to the investments it had made in online food delivery player since 2015. Zomato is said to be targeting an initial public offering this year at a $3.5 billion valuation.
More recently, in October, it emerged that Temasek was investing in Tokopedia, the Indonesian e-commerce giant that is also expected to seek a public market listing.
GIC was the second-biggest direct investor in technology, deploying $2.2 billion, particularly into data centres and cloud computing services. Its most significant deal was a $1 billion joint venture with Equinix that was created to build and operate data centres in Japan.
Edtech was also an area of interest for investors.
Both Temasek and GIC participated in the $1 billion funding round of Chinese edtech startup Yuanfudao. The company, which runs live tutoring platforms and online homework services for 400 million users in China, is valued at $15.5 billion, surpassing India’s Byju’s as the world’s largest edtech provider. GIC also led a $200 million funding round in another Chinese edtech company, Aixuexi.
Foodtech and agritech were other hot investment themes, and both GIC and Temasek were especially active in these sectors. Notable deals include Temasek’s $365 million investment for a majority stake in Israeli micro-irrigation company Rivulis Irrigation in September.
In its latest report documenting activity for the year to December 31, 2020, Global SWF noted that sovereign wealth funds and public pension funds ended 2020 with record assets under management, at $9.1 trillion and $18.4 trillion, respectively.
However, even as the number of deals done held steady in 2020, at 503 compared to 499 the year before, the value of those investments was nearly 19% lower, at $162.3 billion.
This was due to the lower investments by SWFs, which fell 33% to $83.7 billion across 280 transactions.
Still, Global SWF noted that during the crisis, investors such as Temasek, or so-called development funds, have been able to react quickly and acquire strategic assets.