LONG before Temasek Holdings began investing in big banks and financial institutions, it was better known for investing in smaller local companies.
Now, with the recession here expected to be protracted, and investing in global business fraught with risk, the time could be right for Temasek to shift its focus back to Singapore, if only to help credible local businesses survive the downturn.
Temasek has championed specific initiatives to boost local businesses before.
In 1999, it revealed that it had created a $100 million fund called Century Private Equity Holdings (CPEH) 1999 to provide capital to local companies for international expansion. Shortly after, it invested about $18 million in fruit distributor FHTK Holdings. Plastic injection moulding specialist Sunningdale Precision Industries was another company in which CPEH held a stake.
Then, in 2004, Temasek again announced plans to pump in another $100 million into small and medium-sized enterprises (SMEs). This was on top of about $72 million it invested in five companies since 2002 based or listed in Singapore: electronics maker Autron Corp; water treatment company Hyflux; food ingredients supplier Olam International; shipping company Cosco Corp (Singapore); and automotive products distributor and manufacturer YHI International.
Of course, there are different reasons why Temasek invested in overseas companies like Merrill, Standard Chartered, Bank Danamon, Bank of China, and not forgetting Shin Corporation.
However, the criteria for investment has generally been growth and regional expansion. Do so few Singapore businesses match these criteria?
While Temasek has in recent years often said that it is a 'commercially driven' company, this may not always have been its raison d'etre.
Reading very closely between the lines of Temasek's mission statement, one can argue that, unlike GIC, Temasek has a social mandate to support businesses.
'As a long-term investor, we have a stake in the lives and well-being of our fellow men. We recognise that social, environmental and governance factors can impact the larger community as well as the long-term sustainability of companies and businesses,' reads Temasek's corporate profile.
So with the 'larger community' decidedly in need of help, could or should Temasek step up?
Interestingly, almost 10 years ago, Temasek chairman S Dhanabalan said in an interview: 'I have always held the belief that regionalisation is only meaningful if there is a link with Singapore. Otherwise, they'd just be financial investments.' This is a comment that could ring with new relevance today.
This article was first published in The Business Times on January 07, 2009.
