We are owners of our portfolio, working to deliver long term sustainable value to our stakeholders and making a difference in what we do.
Our investment philosophy remains largely unchanged as an owner and investor for the longer term, even as we have expanded beyond Singapore, particularly since 2002. Our portfolio companies have also increased their global and regional footprint over the years. Since 2002, our investments in growth regions have delivered better returns than those in mature economies, though relative performance varies across cycles.
Our investment activities are guided by four investment themes and the long term trends they represent:
- Transforming Economies
- Growing Middle Income Populations
- Deepening Comparative Advantages
- Emerging Champions
As an investor, we continue to focus on intrinsic value and our core risk-return framework. Our investment and divestment decisions are shaped by bottom-up intrinsic value tests. We track investment returns against a risk-adjusted hurdle rate. Our investment strategy, capital allocation, performance measurement and incentive system are driven by this risk-return framework.
As a shareholder, we also identify value creation opportunities within our portfolio companies and engage with the boards and management to share our perspectives, as appropriate, for their consideration. We promote good governance and look to their boards to drive strategy, and their management to manage day-to-day operations.
As an owner, we invest, rationalise, consolidate and divest to deliver sustainable long term value to our stakeholders. We maintain full flexibility to reshape and actively rebalance our portfolio as opportunities or challenges arise. We have the option of taking concentrated positions or remaining in cash. Our capital structure allows us to take a view of long term trends and weather cycles of volatility. We are committed to protecting our portfolio during volatile times.
We invest in unlisted assets to derive better than market returns and benefit from the listings or sales of such investments. Our unlisted assets comprise companies and funds. Our unlisted blue chip companies, such as PSA and Mapletree, and portfolio of high quality funds, pay steady dividends and distributions. Since 2002, our investments in unlisted securities have delivered better returns than our investments in listed securities.
Our investments in funds have been instrumental in helping us gain deeper insights into new markets and have provided co-investment opportunities. We also share some of the investment opportunities with like-minded co-investors.
From time to time, we may express our interest to invest or divest selected positions or manage our portfolio through options and warrants. We may also use derivatives to hedge the currency and share price fluctuations of our underlying investments, where gains and losses of the derivatives are matched against corresponding losses and gains in the underlying investments.
We invest in unlisted assets to derive better than market returns.
We maintain full flexibility to reshape and actively rebalance our portfolio.