Temasek to ramp up allocation of funds to US despite trade war

FILE PHOTO - A Temasek logo is seen at the annual Temasek Review in Singapore July 7, 2016. REUTERS/Edgar Su

Temasek Holdings Pte will continue to increase its allocation of funds to the U.S. despite escalating trade tensions, the Singapore state investor’s head of Americas John Vaske said.

Speaking ahead of the Asia-Pacific Agri-Food Innovation Week summit starting in Singapore Wednesday, Vaske said a substantial portion of Temasek’s available funds had been allocated to U.S. deals. While the trade war with China was adding to uncertainties across the economy, he said the long-term thematics of Temasek’s investments remain sound.

“In the last three or four years, if we freed up a dollar for re-investment, 40 cents of it, plus or minus, is going into the U.S.,” Vaske, who is also head of agribusiness at the S$313 billion ($230 billion) firm, said in an interview.

“If the U.S. and China de-link, we still have to grow the Americas,” he said. “If they operate together collaboratively, we still have to grow the Americas.”

About 15% of Temasek’s portfolio is invested in North America, and around 7% in life sciences and agribusiness.

Some of Temasek’s biggest successes and challenges in recent years have come in agriculture and the burgeoning area of alternative foods. Its early investment in Impossible Foods Inc. has helped keep the plant-based burger company in the race against listed rival Beyond Meat Inc.

But its deal to buy a 3 billion euro ($3.3 billion) stake in Bayer AG has lost value amid a flurry of lawsuits relating to claims a weedkiller brand it acquired when it took over Monsanto Co. causes cancer.

Still, Vaske said Temasek was a long-term investor and remained optimistic the underlying reasons for buying the stake will bear fruit.

‘Fickle’ Markets

“The investment may take a little longer to play out, and it’s certainly had some pressure in terms of people who have a different time-frame than we do, in terms of short-term investors who can’t withstand any sort of downward pressure that this litigation may be causing in the share price,” Vaske said. “But again, the fundamental thesis by which we made the investment still holds true.”

Temasek is Bayer’s second-largest shareholder at 3.65% after BlackRock Inc., data compiled by Bloomberg show.

Future agriculture investments will be skewed toward early-stage investments, increasing stakes in existing portfolio companies and private equity, rather than publicly-listed stocks or single, large transactions until Bayer “plays out,” Vaske said.

“The public markets are way too fickle on some of these things,” he said. “It’s just an uncomfortable place to be.”

Bloomberg

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.