Singapore wealth fund GIC recoups losses from financial crisis

Sep 28, 2010, 4:17 GMT

Singapore - The Government of Singapore Investment Corp (GIC) sovereign wealth fund said it has recouped most of the 20-per-cent loss in its portfolio from the global financial crisis as stock markets recovered in 2009.

'GIC started to selectively take on more risk from the second quarter of 2009 amidst growing confidence in the economic recovery,' deputy chairman and executive director Tony Tan said in GIC's annual report for the fiscal year that ended March 31.

With the rebound in the global economy, increases seen in the value of the government's portfolio in the past fiscal year 'largely offset the loss in the previous year,' said the report, released late Monday.

GIC, the larger of the two Singapore government-owned investment companies, with Temasek Holdings Pte being the other, did not quantify the amount of the loss or the value of its portfolio.

According to the company's website, GIC is 'one of the largest investment management organizations in the world,' managing 'well over 100 billion US dollars in a diverse range of assets.'

In its annual report, GIC said it 'will continue to increase its investments in the emerging economies, especially in Asia,' as it expected slower growth in the developed countries over the next decade.

'We expect high growth in the emerging economies to continue, with expanding domestic demand offsetting slower growth in export demand,' the report said.

GIC said the recovery path for the global economy beyond this year was subject to significant uncertainties as 'sovereign risks have increased, most evidently in Europe, and asset price bubbles could be threats in emerging markets.'

'Slow growth in the developed world would likely keep unemployment high, increasing the risk of a backlash against trade and globalization,' GIC warned.

'The financial landscape has become more volatile with more uncertainty and tail risk,' it said.