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Opinion

Unpacking the GIC result: why all that effort gets only 3.4%

Should an institution with all that scale and ability be delivering more than this? The problem with long-term numbers is they still reflect issues from 20 years ago.

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The Government of Singapore Investment Corporation (GIC), one of the world’s largest and most sophisticated sovereign wealth funds, released on Wednesday its annual report, including its performance numbers.

The result: its 1,500 employees, known throughout the industry as some of the smartest minds in the business, between them achieved an annualized 20-year real rate of return of 3.4%.

It doesn’t sound much for such a vast and capable investment engine. But there are reasons for this, which remind us that no matter how long the time horizon, numbers always need a closer look.

The problem GIC is facing in its long-term numbers is that in stating performance relative to 20 years ago, it is taking us back to the late 1990s.


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