Managing Risks

While we adopt a long-term view of our portfolio, we invest across different time horizons. We have the flexibility to take concentrated positions and invest across all stages of the business life cycle from early-stage to mature, and listed to unlisted assets. 

Our long investment horizon means our portfolio comprises predominantly equities, which are intended to deliver higher risk-adjusted returns over the long term. Our resilient balance sheet allows us to invest in and benefit from companies with high-growth potential through listed and unlisted assets (including private equity funds).

Consequently, given our portfolio’s large exposure to equities, our portfolio is expected to have higher volatility of returns, with greater risk of negative returns in any one year.

Our investment approach is to ride out short-term market volatility and focus on generating good sustainable returns over the long term.

Given the expected volatility, we manage our leverage and liquidity prudently for resilience and investment flexibility, even in times of extreme stress.

Our investment posture is coupled with a culture of risk ownership throughout the organisation. Our risk-sharing compensation philosophy puts the institution ahead of the individual, emphasises the long term over the short term, and aligns the interests of our employees with those of our shareholder.

We have no tolerance for risks that could damage the reputation and credibility of Temasek.

We are guided by our Organisational Risk Management Framework. This includes Risk Return Appetite Statements that set out various levels of risks tolerance, from reputational risk to liquidity risk, and risk of sustained loss of overall portfolio value over prolonged periods.

¹ Includes Foreign Exchange Risk and Environmental, Social, and Governance Risk.

Please click here for our Anti-Bribery and Anti-Corruption (ABAC) Statement.

For more information, please see Managing Risks in the Temasek Review.