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Sovereign wealth fund investment decisions: Temasek Holdings

Author

Listed:
  • Richard Heaney

    (School of Economics, Finance and Marketing, RMIT University, Australia, richard.heaney@rmit.edu.au)

  • Larry Li

    (School of Economics, Finance and Marketing, RMIT University, Australia)

  • Vicar Valencia

    (Rochester Institute of Technology)

Abstract

Sovereign wealth funds (SWFs) are investment portfolios and savings funds that are controlled and actively managed by a sovereign government. In this paper, we document the investment behaviour of a specific fund, Temasek Holdings, which is the Singapore government’s SWF. Using a sample dataset of 150 publicly listed Singapore firms over the period 2000—2004, we find evidence suggesting that Temasek has a predisposition to invest in firms that are relatively large and have few director block holders. The incentive to invest also increases in firms with lower systematic risk and with compensation schemes that provide the board of directors with stocks and options.

Suggested Citation

  • Richard Heaney & Larry Li & Vicar Valencia, 2011. "Sovereign wealth fund investment decisions: Temasek Holdings," Australian Journal of Management, Australian School of Business, vol. 36(1), pages 109-120, April.
    • Handle: RePEc:sae:ausman:v:36:y:2011:i:1:p:109-120
    DOI: 10.1177/0312896210388859
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    References listed on IDEAS

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    Cited by:

    1. Amar, J. & Lecourt, C. & Carpantier, J.F., 2022. "GCC Sovereign Wealth Funds: Why do they take control?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 77(C).
    2. Kerry Liu, 2017. "Singapores Temasek Holdings Control Mechanisms and the Performance of the Firms Controlled by Temasek," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 7(2), pages 188-205, February.
    3. Paul Calluzzo & G Nathan Dong & David Godsell, 2017. "Sovereign wealth fund investments and the US political process," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(2), pages 222-243, February.

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    Keywords

    sovereign wealth fund; Temasek;

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