Sunday, June 4, 2023

Temasek Chairman's Statement on FTX Internal Review

Temasek is one of the class acts of the Sovereign Wealth Fund world and their $275 million hit on FTX, despite being tiny in comparison with assets under management, had to sting. 

From The Sovereign Wealth Fund Institute, May 31:

Temasek Chairman Comments on FTX

Temasek’s Chairman Lim Boon Heng is a former politician in the country. He was a member of Parliament between 1980 and 2011, and served in the Cabinet between 2001 and 2011. He also served as Chairman of the People’s Action Party between 2004 and 2011. Temasek suffered a writedown of US$ 275 billion due to the FTX collapse.

In a letter on Temasek’s website, he said: “With FTX, as alleged by prosecutors and as admitted by key executives at FTX and its affiliates, there was fraudulent conduct intentionally hidden from investors, including Temasek. Nevertheless, we are disappointed with the outcome of our investment, and the negative impact on our reputation.”

He also expressed the necessity of investing in “new sectors” and “early stage companies.” Further, “An independent team has conducted an internal review of the investment and the findings were directly presented to the Board Risk & Sustainability Committee and to our Board. Although there was no misconduct by the investment team in reaching their investment recommendation, the investment team and senior management, who are ultimately responsible for investment decisions made, took collective accountability and had their compensation reduced.” The letter concluded with this statement....


So no clawbacks, or at least none mentioned. 

Here's Temasek's November 2022 statement on the investment.

The team that made the investment should at least be made subject to some sort of high-water-mark tacked on to their compensation hurdle rates. 

Last I saw the Fund's various portfolios were valued at something like S$400 billion (US$295 billionn)

Temasek has a history of going into early and/or riskier rounds than other SWF's though that may be getting curtailed for a while. Singapore's Business Times:
So S$24 billion or so. 
If interested we have dozens and dozens of posts on Temasek including this from 2020:
French Startup ManoMano Raises €125 in Series E Round
Temasek is always woth paying attention to.$230+ billion portfolio, not flashy/splashy, they just make money.