Singapore’s government responded to concerns over the performance of state-owned investors Temasek and GIC after questions on returns and accountability were raised in Parliament.

Responding to a parliamentary question on whether the state sues to recoup investment losses, senior minister of state for finance Jeffrey Siow said both Temasek and GIC operate as commercial entities and are expected to safeguard the value of their investments as part of their fiduciary duties.

He said any legal action would be taken on a commercial basis, weighing legal merits, jurisdictional considerations, and potential costs and benefits. 

The parliamentary exchanges come as Temasek and GIC face increased scrutiny over long-term returns. GIC reported a 20-year annualised real return of 3.8% for the year ended March 31, 2025, down from 3.9% a year earlier and its weakest showing since 2020.

Meanwhile, Temasek reported a 10-year total shareholder return of 5% for the same period, lagging major equity benchmarks. Its 20-year return of 7% was broadly in line with global peers. Temasek managed a portfolio valued at S$434 billion as of March 2025. 

In a Financial Times report last month, returns at both institutions were described as “poor” relative to global peers.

In a separate response to a question on how senior management incentives are structured, Siow said remuneration decisions at Temasek and GIC are made by their respective boards, and that the government does not interfere in operational matters, including executive pay. 

“Both GIC and Temasek have said that they adopt remuneration frameworks for their senior management which are market competitive and promote good performance,” said Minister Siow, adding that the government will continue to assess entities’ performance in meeting their mandates net of fees and expenses. 

The Government will continue to assess entities’ performance in meeting their mandates net of fees and expenses.

Concerns in the AI era

The renewed focus on mandates and long-term returns comes as AI and data centre infrastructure demand accelerate globally, raising capital requirements and extending investment horizons. 

Both investors have highlighted infrastructure as part of their investment approach, alongside public and private market exposure. AI-driven data centres, power, and connectivity sit within that scope, but these require heavy capital investment, long payback periods, and higher risk tolerance. 

Neither Temasek nor GIC has disclosed how much capital is allocated specifically to data centres or AI infrastructures, but the parliamentary debate highlights the growing tensions between long-term investment mandates and short-term performance scrutiny as capital-intensive AI buildout gathers pace. 

In July last year, Temasek said it was allocating more capital to core-plus infrastructure, an asset class it framed as offering resilient, risk-adjusted returns and steady cash yields. 

It linked the shift to electrification and rising demand for AI data centres, and said it would invest both directly and through partnerships, drawing on portfolio companies including Keppel, PSA, Sembcorp, and SP Group.

Meanwhile, GIC has significant exposure in data centres. It was a cornerstone investor in NTT DC REIT, which listed in July 2025.

Last September, Vantage Data Centers said it secured a US$1.6 billion investment led by an affiliate of GIC and a unit of Abu Dhabi Investment Authority to expand its Asia-Pacific platform.

GIC also has a US$1 billion joint venture with Equinix to develop and operate hyperscale data centres in Europe.