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June 3, 2026

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Instincts from public service useful in navigating ‘stark’ new reality for investments: Temasek chairman Teo Chee Hean

Mr Teo was giving his first interview as Temasek chairman after more than five decades in public service.

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SINGAPORE: Fast-moving, volatile global events have resulted in a shift in how the business of investment needs to be approached, said Temasek Holdings chairman Teo Chee Hean on Tuesday (Jun 2).

“The intersection between security, geopolitics, business, finance has become more stark,” said Mr Teo, adding that this affects the key markets and segments in which Temasek invests.

Speaking in his first interview with local media since he became Temasek’s chairman in October last year, he said that since joining the state investor, the investment environment has been volatile, involving tariff wars and active military conflicts impacting the world’s economy.

“Investment is no longer a straightforward business of doing the numbers on the spreadsheet and analysing just the economic cycles and the financial situation of the company,” said Mr Teo.

Hence, his previous experience in government has been “useful” in his new role as chairman, said Mr Teo. Temasek announced in June last year that Mr Teo would take over the role from his predecessor Mr Lim Boon Heng, who held the position for 13 years.

With a career in public service spanning 53 years, Mr Teo’s past Cabinet appointments include Minister for Defence, Home Affairs and Education, as well as Deputy Prime Minister.

Prior to his retirement from politics in April last year before the 2025 General Election, he was Senior Minister and Coordinating Minister for National Security.

“I suppose those instincts are useful also, to understand what’s happening in the world and the interactions and what might occur,” he said.

In the past, conversations at the World Economic Forum’s Davos meetings would focus on economics, and security issues would be discussed at the Munich Security Conference.

Now, however, security issues are given the spotlight at Davos too, said Mr Teo, who is presently a senior advisor in the Prime Minister’s Office.

US-CHINA RELATIONSHIP, MIDDLE EAST CONFLICT

With Temasek investing in the US, India, Europe, China among other markets, Mr Teo noted that each market is impacted differently by geopolitical events.

Some segments, such as technology, have also become more sensitive – with those who have the resources wanting to keep the advantage for themselves and use it as leverage, he said.

Amid the challenge of investing in such a climate, Mr Teo said Temasek has a strong team and good foundation to tackle the volatility.

Nevertheless, there are positive signals in the US-China relationship recently.

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“In past years, at the Shangri-la Dialogue, my sense was that they were talking past each other, and that talking was at various decibel levels,” he said, referring to the defence forum that took place over the weekend that he attended.

This year, the decibel level has come down and both sides mentioned words such as “constructive”, “strategic” and “stable” to describe their relationship.

“This time there was at least a convergence point around these four words, of what that relationship between the two countries should be, and I thought that was something positive,” he said.

Asked about the Middle East conflict, Mr Teo said the second-order effects of the war will likely last for a long time, giving the example of how food prices will rise because of the disruption to the fertiliser market.

Despite this, Temasek has a “significant” presence in the Middle East and sees continued prospects there, he said.

Mr Teo said the Middle East has a lot of resources, high ambitions, and “increasingly high ability to see through these ambitions”.

Temasek’s portfolio companies and direct investments can contribute to and benefit from such ambitions, he added. “We are looking carefully at what we can do there and we are prepared to step in when the opportunities arise.”

Companies in Temasek’s portfolio such as PSA, SATS and ST Engineering are already involved in activities in the Middle East.

Temasek has also partnered with BlackRock’s Global Infrastructure Partners, Abu Dhabi’s sovereign investment platform and the Abu Dhabi National Oil Company to invest in the Gulf region and Central Asia.

Mr Teo said Temasek is “actively looking” at opening an office in the Middle East and finding the right time to do so because there are opportunities for investment in the region. He did not elaborate on where the office might be located in the region.

Temasek currently has 13 offices in nine countries.

WHAT TEMASEK LOOKS FOR IN AI

On the topic of technology investments, Mr Teo said Temasek looks for companies that are going to be strong and creative in their applications of artificial intelligence.

“They are able to create value, and they will disrupt others,” he said.

Temasek has invested in Claude-developer Anthropic and AI-chipmaker Nvidia, among other AI businesses.

Besides the companies that are developing large language models, there is a “rather large stack” that investors can look at, which may not get caught up in geopolitical arguments, he said.

The technology will be a “major game changer” that will create an entirely new sector, and there will be AI-native companies that “come out of nowhere” with new lines of businesses and services, said Mr Teo.

He said investments into tech seem to focus on a “fairly narrow” segment of the AI field, and that is drawing resources away from other parts of the market.

“It’s sort of, in a way, almost distorting the market,” he said.

This is why Temasek looks for “long-term sustainable absolute returns” in AI, said Mr Teo.

“That’s our key, so we try and look through some of these, we participate, we look through them and look for long-term sustainable returns.”

TEMASEK’S ROLE IN SINGAPORE

Mr Teo also fielded questions on the recent restructuring at Temasek and its role in the Singapore stock market.

He previously served on GIC’s board for 14 years, including as chairman of its international advisory board.

GIC invests Singapore’s reserves and primarily does so outside the country, whereas Temasek does not receive regular injections from the government. Temasek invests in Singapore and largely in the equity space.

On Temasek’s restructuring, he said it has helped to give the company greater focus and attention to each of the three segments of its portfolio.

In April, the company set up three entities to manage different parts of its portfolio: Temasek Global Investments, Temasek Singapore and Temasek Partnership Solutions.

Mr Teo said each segment requires a different way of working, and provides opportunities for staff to develop their leadership skills.

“We have decentralised some of the decision-making on investments to these groups, so they will have greater ability to make decisions within the groups, and also more responsiveness and flexibility,” he said.

He said Temasek is also able to place decision-makers nearer to the markets they oversee.

On Temasek’s role in the Singapore stock market, Mr Teo said the company is sometimes criticised for being too dominant in the local market.

“You have to decide whether you want us to do more or not, but we will contribute to the Singapore economy in a variety of ways,” he said.

Local listed companies such as DBS, CapitaLand, Singapore Airlines and Singtel are part of Temasek’s portfolio.

The state investor helps to develop these companies, which does have an impact on the stock market, said Mr Teo.

When asked what keeps him awake at night about Singapore’s future, Mr Teo said he would answer the question outside of his role as the Temasek chairman.

Mr Teo then said he is pleased to see how Singapore’s next generation leaders have taken on the challenges of the times.

The stability in political leadership in Singapore, and the way leaders work for the benefit of the country and its people is not something to be taken for granted, he said.

In contrast, other countries have become divided and are unable to act cohesively for their long-term good, he said.

“We must understand that we are a fragile society. If we forget that, then that’s at our peril,” said Mr Teo.

“But if we understand that, and we all work hard to overcome those inherent fragilities in our society and work together, we will be okay.”

Source: CNA/an(nj)

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