Temasek has always been one of the world’s most interesting sovereign wealth vehicles: in asset allocation, mandate and style it looks quite unlike most of the classic diversified sovereign funds.
But Covid-19 has made it more striking still, bringing into sharp relief its dual role as an unemotional long-term investor and as a steward with a duty of service to the nation.
There have been no clearer examples of this than Temasek’s role in the SIA (Singapore Airlines) capital raising, announced in March with a S$15 billion ($11 billion) target through a rights issue and a tranche of mandatory convertible bonds.
Temasek backstopped both, pledging not only to take up its own considerable entitlement as a 55% shareholder but also any shortfall.
In the event, Temasek’s underwriting of the deal persuaded the market to participate; the rights issue, though not the convertible, was fully subscribed.
So Temasek had achieved two things in one go: it had made an interesting long-term contrarian investment; and it had performed a national service in reviving confidence in a key Singaporean asset that was under enormous stress.
Goldman Sachs called it the “gold standard” of coronavirus-related rescue packages.
But was it just a rescue package? That’s not quite the right way to look at it.
“Clearly,
