Singapore’s state-owned investment company, Temasek, is set to allocate up to $30 billion for investments in the United States within the next five years. Key sectors targeted for this substantial investment include healthcare, financial services, and technology.
Jane Atherton, the head of Temasek’s North America division, highlighted the robust nature of the U.S. capital markets. “The U.S. is at the cutting edge of developments, especially in artificial intelligence,” Atherton shared in an interview with Reuters.
The U.S. economy has shown impressive growth, outpacing expectations in the second quarter. This has positioned it ahead of global counterparts. Despite recent market volatility, the S&P 500 has risen by 14.5% this year, buoyed by enthusiasm surrounding advancements in artificial intelligence.
China has faced economic challenges, reporting slower-than-expected growth and implementing interest rate cuts to stimulate its economy.
A Temasek logo is seen at the annual Temasek Review in Singapore
Currently, about 22% of Temasek’s investments, totaling $63 billion, are in the Americas, while 19% are in China. This marks the first time in a decade that Temasek’s investments in the Americas have surpassed those in China.
Temasek’s investment focus in the U.S. includes sectors like data centers, semiconductors, and battery storage, which are crucial for the advancement of artificial intelligence.
Profits from U.S. and Indian investments have helped offset underperformance in China, according to Temasek. The company is adopting a cautious approach towards China amid ongoing trade tensions.
“Geopolitical factors always play a significant role,” Atherton noted, adding that China’s economic performance has lagged behind the U.S. over the past three years.
Temasek manages a $288 billion portfolio, emphasizing long-term investments driven by themes such as digitization and sustainability.
Future performance of U.S. stocks will heavily depend on earnings, particularly within the tech megacap sector. “While there has been some expansion in multiples, it’s driven by higher growth, which is expected to be sustainable,” Atherton explained.
Temasek is exploring opportunities in both public and private markets, as more private equity firms seek to divest.
