Government of Singapore Investment Corp., manager of more than $100 billion of the city-state’s reserves, placed three of its top executives in new roles to reflect its push into emerging markets.
Seek Ngee Huat, president of its real estate unit, will chair the Latin America business group, while Teh Kok Peng, head of special investments, will lead the China business group, GIC said in an e-mailed statement today. Quah Wee Ghee, the asset management president, will become the India group chairman. The three will step down as GIC board members next month.
“The growing recognition is developed economies have a lot of structural problems, so fundamentally, emerging economies are much stronger and there are very favorable trends unfolding as well,” said Lee King Fuei, a Singapore-based fund manager at Schroders Plc, which oversaw $331 billion worldwide as of March 31. “Over the next decade, emerging markets are likely to outperform.”
GIC, set up in 1981, is seeking new growth areas as it said last month it expects the investment outlook in the next 30 years to become more challenging. The fund, the biggest investor in companies including Citigroup Inc. and UBS AG, is also trying to boost returns to tackle future crises and meet the country’s long-term spending needs.
Emerging Markets Push
“The leadership changes will strengthen GIC’s capacity to pursue investment opportunities for the future given the new financial landscape and GIC’s increased push into the emerging markets,” Executive Director Tony Tan said in the statement. The regional groups were set up to “coordinate research, relationship-building, development of expertise, and strategic investment activities across multiple asset classes,” he said.
The MSCI Emerging Markets Index has outperformed shares of developed nations in nine of the past 10 years, according to data compiled by Bloomberg. Shares of emerging countries are valued at 12.5 times reported earnings, less than a multiple of 14.3 for the MSCI World Index of developed economies.
Lyxor Asset Management, which sold almost all of its emerging-market equities at the end of last year, said in May it turned bullish on the stocks as valuations became more “attractive.” Mark Mobius, who oversees more than $50 billion as executive chairman of Templeton Asset Management’s emerging markets group, said last month he’s looking at “very rapid growth” in emerging markets, expected to expand at more than three times the pace of developed economies.
Lim Chow Kiat, who led GIC’s Europe group, will replace Quah as the asset management president, while Lim’s role will be taken over by Jeffrey Jaensubhakij, head of North American equities, GIC said.
Goh Kok Huat, former managing director of equity capital markets at Tishman Speyer in New York, will replace Seek as president of GIC Real Estate, while Tay Lim Hock will take Teh’s job as president of special investments, it said. The appointments take effect July 1.
The fund said last month it had average annual returns similar to a 10.2 percent gain in equities since its 1981 inception as its investments, which are long term and include assets such as real estate, had “less risk” than stocks. GIC is ranked the world’s eighth-largest state investment company by Sovereign Wealth Fund Institute.
Singapore Prime Minister Lee Hsien Loong was named GIC’s chairman on May 31, succeeding his father Lee Kuan Yew. The elder Lee, who also resigned from the cabinet last month to make way for younger leaders, took the role of senior adviser to the sovereign wealth fund this month.
Prime Minister Lee’s ruling People’s Action Party won the May general election with the smallest margin of popular votes since independence. The party that has ruled Singapore for more than five decades won 81 out of 87 parliamentary seats and 60.1 percent of the popular vote.