Sustainable return, acceptable risk

GIC invests the reserves placed in our care by taking acceptable risks todeliver the best possible long-term return.

Capabilities

GIC strives to make the most of every investment opportunity to enhance returns on a total portfolio basis

without taking too much risk. We invest primarily through our three investment groups – public markets, private

equity and real estate. Our investment teams achieve strong performance over time by leveraging GIC’s core

strengths: a long-term investment perspective; a global presence; and capabilities to invest in cross-asset

opportunities.

Public Market Investments – invests in publicly-traded markets, including equity and fixed income. GIC

pursues both active and passive management strategies in equity investing. Our team of in-house research

analysts and experienced portfolio managers conduct in-depth due diligence and research that enable us to

identify undervalued stocks with the potential to generate good returns over the long-term. In fixed income,

our portfolio managers employ a range of investment strategies to add value to the portfolio, including yield

curve analysis, and credit, interest-rate duration and currency management.

Private Equity Investments – invests through funds as well as directly in companies, partnering with our

fund managers and management teams to help world-class businesses achieve their objectives. We are one

of the largest investors in private equity funds and currently have over 100 active relationships with fund

managers globally. We have also invested directly in more than 1000 companies globally across multiple

sectors.

Real Estate – invests in prime real estate worldwide. We manage a multi-billion dollar portfolio of direct and

indirect property investments with more than 350 investments in over 40 countries, across most sectors. We

are able to capitalise on the best investment and divestment opportunities as we operate in the entire real

estate universe, from brick-and-mortar assets to public equities such as real estate operating companies,

real estate investment trusts, and real estate-related debt instruments.

(http://www.gic.com.sg/)

In tegrated d iversity

Our deep expertise and in-house experience across asset classes enables natural cross-asset class

synergies in deal sourcing, sharing of market knowledge and execution of investments.

Our investment strategy is one of integrated diversity. The new and unique investment opportunities which

continually arise call for GIC to operate as one integrated organization, fully exploiting our range of in-house

asset class expertise and experience to optimise investment results. Our extensive team of on-the-ground

specialists at our wide network of offices have their fingers firmly on the pulse of the world’s markets,

enabling us to respond quickly to investment opportunities.

How we invest

Our investment framework distinguishes the three drivers of long-term performance for GIC: the performance

of global markets, represented by the Reference Portfolio; our asset allocation strategy, as seen in the Policy

Portfolio; and skill-based strategies, as embodied in our Active Portfolio.

The Reference Portfolio comprises 65% global equities and 35% global bonds, which is a generally accepted

passive alternative portfolio. It represents the Government’s risk and return tolerance. The Reference

Portfolio is not a short-term benchmark for GIC. In fact, GIC can only benefit from long-term investing if it is

prepared to tolerate short-term losses or underperformance relative to the market indices from time to time.

The Policy Portfolio is the central component of the investment framework. It represents the key driver of

returns over the long-term. The six core asset classes of the Policy Portfolio are:

Developed market equities

Emerging market equities

Nominal bonds and cash

Inflation-linked bonds

Private equity

Real estate

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The Active Portfolio comprises skill-based strategies to add value to the Policy Portfolio. These strategies are

limited by a risk budget set by the GIC board. The strategies are funded by the sale of assets in the Policy

Portfolio so they must generate returns sufficiently higher to compensate for the cost of capital and the

higher levels of risk entailed.

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