Today’s market shifts — from geopolitical risks and capital flows to less predictable inflation cycles and rapid technological change — demand greater flexibility in how portfolios are constructed. For long‑term investors like Temasek, this reinforces the complementary role that alternative assets play as part of a diversified portfolio, strengthening resilience and supporting long‑term value creation.
In brief:
Markets are evolving amid geopolitical shifts, capital flows and faster technological change. As a long-term investor, we build our portfolio across public and private market exposures, including funds, partnerships and asset management platforms that broaden our range of opportunities and strengthen resilience across cycles.
Broadly speaking, alternative assets are investments beyond publicly traded stocks and bonds. They include:
Private equity funds
Investments in private companies with general partners, who often work closely with management teams to improve operations and scale businesses.
Private credit and hybrid solutions
Lending or structured financing provided outside of public debt markets. These solutions are often tailored to borrowers’ need and may span senior debt, mezzanine debt, preferred equity or other capital structures.
Other less-correlated returns strategies
Strategies that seek returns from a broader range of market, macro, credit, insurance-linked, royalty or other exposures, with the aim of diversifying portfolio return drivers.
Within our portfolio of public and private assets, alternatives play a complementary role. They allow us to diversify exposure and strengthen resilience across market conditions. They also help us deepen partnerships, extend our reach, access opportunities and scale our capital.
Many investments which fall within the definition of alternatives sit in our Partnerships, Funds and Asset Management Companies (PFAs) segment, which constitutes about 20% of our portfolio.
Through PFAs, we collaborate with industry leaders to offer and scale capital solutions such as private equity, private credit, public market investments, and tailored financing options. We have built long-standing relationships with global managers such as EQT, KKR, TPG, Brookfield and Global Infrastructure Partners, committing capital as limited partners and co-investing alongside them in high-conviction opportunities. These relationships can deepen into strategic partnerships — such as O2 Power, a joint venture with EQT launched in 2020. In April 2025, both Temasek and EQT divested their stakes in O2 Power to JSW Neo Energy, realising gains.
Since the early 2000s, we have built asset management platforms to scale our exposure to emerging assets and diversify investments across the capital structure. They include Seviora, Vertex, Clifford Capital, 65 Equity Partners and EvolutionX Debt Capital.
We have also been investing in credit funds for over a decade. In 2016, we assembled a credit and hybrid solutions team to expand our direct and fund investments in the private credit space. We set up Aranda Principal Strategies in 2024, a dedicated platform that invests across the capital structure -- from senior debt to hybrid solutions as well as in equity in long term credit platforms -- while also overseeing LP commitments into credit funds. This is in addition to SeaTown Holdings’ private credit solutions in Asia.
Under our T2030 strategy, alternative assets complement our portfolio segments by adding diversified return streams, capital-structure flexibility, and access to opportunities beyond public markets.
Private Equity Funds
A growing share of enterprise value is being created outside public markets, as businesses stay private for longer and innovation accelerates across areas such as artificial intelligence, healthcare, financial services and energy transition.
Through private equity funds and partnerships with leading managers, we can access companies earlier in their growth journey and benefit from specialist sourcing a company’s lifecycle. We partner with top-tier managers with consistent track records, including EQT, KKR and TPG.
Private Credit and Hybrid Solutions
Private credit has grown significantly as companies seek more bespoke financing solutions beyond traditional bank lending or public debt issuance. Since 2007, the market has grown from USD 250 billion to USD 2.5 trillion. By investing in private credit, long-term investors have opportunities to provide capital across the capital structure, while earning higher returns that reflect the illiquidity risk.
Private credit and hybrid solutions allow us to meet evolving financing needs, diversify income sources and deploy capital in structures that can be adapted to market conditions.
Other Less-Correlated Return Strategies
Periods of market volatility can create both risks and opportunities. Interest-rate shifts, currency moves, geopolitical shocks and market dislocations can affect public equities and bonds concurrently.
We invest selectively in differentiated strategies that seek to generate less correlated returns and buffer the portfolio during stressed markets. These may include macro hedge funds, closed-block insurance, royalties and other assets with return drivers that are less directly tied to broad market performance.
Diversification
Broader sources of returns beyond traditional equities, reducing reliance on broad market performance.
Broader market exposure
Provide access to private companies, specialist managers, co-investments and financing opportunities that are not always available in public markets.
Resilience
Certain strategies are designed to perform across different market environments, helping to build a portfolio that can better withstand volatility over time.
Partnerships and capability building:
By working with leading global managers and building our own platforms, we deepen networks, sharpen investment insights and scale capabilities in areas where expertise matters.
Investing in alternative assets require careful manager selection, governance and underwriting discipline as they can be less liquid than public markets and more complex to value. We therefore invest in alternatives selectively and with a long-term perspective. We focus on trusted partners, rigorous diligence, portfolio fit, governance standards, liquidity needs and risk-adjusted returns.
Alternative assets are part of how Temasek positions its portfolio for a more complex world.
Alongside opportunities in areas such as artificial intelligence and core-plus infrastructure, alternatives help us broaden our opportunity set, diversify return streams and deploy capital with greater flexibility.
Used with discipline, alternatives support our T2030 objective of building a resilient and forward-looking portfolio – one that can better withstand market shocks, participate in long-term growth and value creation opportunities, and deliver sustainable returns above our risk adjusted cost of capital.
Through targeted investments, trusted partnerships and disciplined risk management, we remain committed to doing well, doing right and doing good – so every generation prospers.
