Monday, February 16, 2009

The Temasek Experience....

"Sometimes we feel that we move at the speed of thought....funding in London, negotiations in Bangalore...nobody knows where the next deal will be....." - Temasek Recruitment Video.

Temasek Holdings hires 320 people and has offices around the world "seeking out opportunities", "taking concentrated positions". I always wonder why do they need to hire so many people to cut so many little deals all over the world - is it practical to do this? Shouldn't they just keep their equities investments simple by just investing in the best blue chips in each country instead of high risk positions such as ABC Learning, Global Crossing, startups in Silicon Valley? .... Can the resultant return/risk characteristics of their entire portfolio can be achieved by broad allocations in various asset classes?

Hiring 320 people to lose $58B just seems so downright inefficient to me.

30 comments:

Anonymous said...

"Liao", "habis" are pessimistic words I don't like to utter but under the cirsumstances, I think it is more factual than being just pessimistic about Singapore reserves.

This is a govt gone mad, very mad.

Senior Minister of State for Finance Lim Hwee Hua responded thus - after Temasek lost 31% of its value and now as rumoured GIC's loss is 41%.

"Singapore's reserves will not be depleted by losses incurred by Temasek Holdings and the Government of Singapore Investment Corporation (GIC)"

Lets send all these people, LKY, Ho Ching included to Woodbridge.

We are now a nation run by mad people.

S'poreans be prepared for great pain & turmoil to come unless these crazies are quickly arrested and put behind bars.

Anonymous said...

President, Ministers, Civil Servants, Judges, MPs, kowtow to Emperor KY, who is so silly to bite the hands that feeds them, who want to be jobless during the Economic Tsunami, who, who, who in influential positions dares speak up.

Even foreign news media are busy licking their wounds, whatever happened at Temasek, GIC would be buried with Emperor KY.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

To all mouse of singapore,
be not naive that the next GST will be 15% at the rate of astronomical loss of reserves and assets. They will happily tell you that GST will increase at the rate of 1.5% per year.

1.5 * 5 = 7.5 , with final year as 2%...

Mark my words, it will happen if you continue to vote for the clowns.

Let us not be clowns anymore to tolerate such nonsense...
Let us be the mouse that not only bark, but bite the ass of those clowns.

Anonymous said...

"LKY said on his visit to Suharto in hospital that Indonesians are not being grateful to Suharto. He said that as long as there is progress and development corruption and cronyism do not matter."

Can anyone check if majority of these 320 clowns related to Lee family ?

Anonymous said...

i could give temasek a better return just by betting on man utd on all its home games with the same amount every time. the 320 are nothing more than people who have connections, look presentable, ball carrying and utterly useless people.

Anonymous said...

The Temasek experience.
"what is that i bought again?, geez, i am just not good with numbers, can we have pop up proposal for the next meeting?"

Anonymous said...

Lucky Tan,

Maybe they knew something that you don't. To you, they may be inefficient, they lose a big sum but to them it's OK. That's why they are there and you are here, and as a blogger only.

Don't worry Singapore won't be like Iceland. The Sing dollar is still very sound according to Jim Rogers, an investment guru and billionaire. He even relocated here to prove his point.

Folks, don't worry about the Temasek or GIC losses, just ensure you have enough of your own reserves in Sing dollars.

LuckySingaporean said...

anon 10:26,

I think Icelanders were not very worried until everything fell apart. Remember Mas Selamat's escape, MM Lee blamed it on complacency....he would view the concerns that people here have for the NATIONAL reserves as something positive.

You, me, bloggers, critics may not be experts at fund management but that doesn't mean we cannot generate relevant questions. You may not know how to build a car but you know it has to have safety belts, airbags and that the brakes are reliable. Similarly, you may not be a fund manager capable of constructing a portfolio, but you know that there has to be risk management, monitoring, diversification etc. What happened to diversification in Temasek, btw? 40% in banks...that couldn't be right!...and any ordinary person with basic information could have picked it up.

Onlooker said...

According to the YOUTUBE Video.
First Ad:- Their con man goal is to squander all our hard earned money on dubious investments.
That for us to determine(so long as ....)
Second Ad:- "Moving at the speed of thought" == Do not research and consider the result of the investment.
Robert Chong can't even pull a con just look at his face @3:40 and 4:00.
But the most unconvincing con man face is Simon Israel @4:10. Although he does resemble Ron Paul.

Anonymous said...

Anon 10:26 PM you made a pertinent point that there may be things that top politicians know that we don't.

And I might suppose a politician like LKY can even persuade some of his severest critics that things are not as simple they might think. There is economic struggle among the superpowers, Singapore is geopolitically very vulnerable and needs strong defence with superpower backup ...so on and so forth.

But how sure can we be that our own top politicians are not being taken for a ride by that superpower, whose culture is one of "hire and fire" even on the political level?

These are things we are not told but we should not be totally ignorant. We can guess and we should opine.

Remember Iraq, which was an ally of that superpower to contain Iran. In the end, that country ended up being destroyed by that same superpower.

Top politicians that are self-enamoured of their own wisdom without listening to the views of others risk sacrificing their own country to ruination.

For this reason, citizen vigilance is a good thing. The world is still a dangerous place.

What happened to the concept of non-alignment. LKY jettisoned it more than a decade ago but I think he went too far to behave too obsequiously to that superpower.

Watch closely. Even the American Presidency is subject to a group of money masters and they appear to be still in control despite what we see as the collapse of their empire.

It is all a mirage they created for the world to see, the real purpose being to write off huge national debts in one bold stroke.

After all if other large nations like those in South America can default on IMF loans every few decades, why can't that superpower?

Anonymous said...

just learn to beg.

solved!

yamizi said...

"nobody knows where the next deal will be"

how apt

Anonymous said...

btw, if hangout/assistance not enough or dont work, try not to break the law ok?

it will break their hearts to see you in jail or get fine. sob sob

break oncoming train can. not the law ok?

Bernie Madoff said...

So someone finally blurted out a number, 41%. We can now try and put a handle on GIC losses.

I've done some digging around, and in this paper at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1141531, buried in page 23 is a table outlining a likely portfolio for GIC. The estimated size is $310B USD.

I assume these were losses in the equity portfolio and the debt portfolio (and 41% would be catastrophic if it were an overall figure).

0.41 x 124 = $50.84B USD = $76.7B SGD losses.

Not too shabby, now you're playing in my league, although even in my worst year I never lost as much as 41%!

rookielim said...

Guys, there is a letter purportedly by Andrew M. Cuomo Attorney General of the State of New York to Honorable Barney Frank Chairman, House Committee on Financial Services being circulated that detailed US$3.6 billion being issued as bonuses by ML. Not sure how authentic this letter is. The following is an excerpt of the letter. If this is true, then the 320 people hired by Temasek clearly did not understand what they are getting themselves into.

My questions also remained unanswered. Did these 320 people in Temasek also get similar fat bonuses for the monumental screw-ups?

"Bearing in mind that Merrill moved up its bonus payments in advance of its announced $15 billion quarterly loss and $27 billion annual loss, we have determined that Merrill Lynch made the following bonus payments:

The top four bonus recipients received a combined $121 million;

The next four bonus recipients received a combined $62 million;

The next six bonus recipients received a combined $66 million;

Fourteen individuals received bonuses of $1 0 million or more and combined they received more than $250 million;

20 individuals received bonuses of $8 million or more;

53 individuals received bonuses of $5 million or more;

149 individuals received bonuses of $3 million or more;
2

Overall, the top 149 bonus recipients received a combined $858 million;

696 individuals received bonuses of $1 million or more.
Again, these payments and their curious timing raise serious questions as to whether the Merrill Lynch and Bank of America Boards of Directors were derelict in their duties and violated their fiduciary obligations.

Anonymous said...

to anon 9.26pm, omg, are you sure he said that??? was that another pap-freudian slip?

as for lim hwee hua, yeah, she is right. gic will not be DEPLETED. thereotically, if gic has got $1 left, it is not depleted YET.

the morons!

(ps. i'm referring to the 66.6%)

Anonymous said...

Senior Minister of State for Finance Lim Hwee Hua responded thus - after Temasek lost 31% of its value and now as rumoured GIC's loss is 41%.

"Singapore's reserves will not be depleted by losses incurred by Temasek Holdings and the Government of Singapore Investment Corporation (GIC)"

It was amazing that Minister of State for finance can deliver the report of the lost figures without flinching. I believe she deserves the TCS supporting actor award this Year 2009

Prata_Kosong said...

I dunno why but suddenly the Late President Mr Ong Teng Cheong comes to mind.

I salute him for trying to do something when he was President!

Anonymous said...

The real heroes are not in there but out here like blogger Lucky Tan.

It is a very incredible he can keep up with all these issues over the years.

Anonymous said...

The way Merrill Lynch handed out US$3.6 billions in bonus to its fat cats ( and our beloved ST even reported that ) it looks like the big money boys are challenging Obama to a fight : "Lets see what you can do to us."

Remember after he was elected and just before he stepped into office, Israel started a war. Any keen observer could have guessed it was timed as a provocation to see which side Obama was on. And he refused to make any comment on that issue until now.

Now to LKY. LKY probably thought he was part of that inner circle of money masters; he was probably even consulted on "debt forgiveness" issue and for America!

Remember few years back he called for debt forginess for the third world countries and it was done. But I don't think the big money boys really need his advice in the first place, they were just creating a ego-trap for him to walk in.

LKY probably fell into the same trap that China placed before him (remembered China used to "consult" him, that fool) and which is now history - the Suzhou Industrial Park saga.

Of course when you are consulted and your idea is accepted you got to walk the talk. Hence over S$40 billions of Singapore's money pumped into the faltering banks and a year later about to be totally wiped out.

Anonymous said...

1. 320 people. Well, we dont really know the inner workings of the organisation due to the lack of transparency. So its not in our position to judge on this.

However, i did read sometime back that they hired PLENTY of consultants - as in the Shin Corp acquisition, the ML and some of the other financial investments. i.e. they took advice from elsewhere before making a deal.

Was there a conflict of interest that GIC/Temasek wasnt aware of? Was it a case of "i only get commission if this deal goes through"? the same case as in the property agent hullabaloo and the Relationship managers in retail banking?

I wouldnt be surprised if this was the case. They couldnt police the retail bankers and property agents, thus they probably also oversaw this at their level of transactions.

2. Some of my friends on the sell-side who had to deal with Temasek/GIC folks - they said GIC/Temasek people are the most anal, narrow-focused, and cover-my-arse-first people they've met. They mostly take orders from above.

I cannot comment whether they're connected to the "ROYAL" family, but you can assured these are folks groomed from the very start i.e. elitists.

3. I can fully appreciate the need for secrecy in their portfolios, as they are not a public-listed company.

But sometimes, some rumours and news do leak out and you wonder who decided to make some investments.

e.g. i hear that Temasek is a shareholder in a few restaurant chains such as Nobu. i.e. our govt is a partner just like Robert De Niro!

i cant confirm this, but i find it interesting if this is true.

Anonymous said...

I wonder how are executives in Temasek incentivised? When they make positive returns, do respective MDs get a higher bonus? In a horrible year such as this, with S$58 bn losses, does anyone know if Temasek executives still get bonuses and pay increments? Are they still flying first/business class?

Anyone out there knows?

Anonymous said...

'I wonder how are executives in Temasek incentivised'

Well, that answer can obviously be deduced from the 'retirement' of Dr Yeo Ning Hong from Tamasek years ago (correct me if I am mistaken) when he questioned someone's daughter-in-law about the exhorbitant bonuses paid to some people. Dr Yeo was even taken to task by the father-in-law for being out of touch and for making such a fuss.

Lost Citizen

Anonymous said...

To 3.23pm

I dunno about Temasek but at GIC they use relative return as the criteria. That is, as long as the Fund Manager outperforms the index even in a downturn ( read incurring real as well as book losses ) he will still be paid an incentive. Heard that in 2006, a couple of ADs got Millions and at least one tendered his resignation to strike out on his own but had to serve 1 year's notice. In any other fund management outfit the moment you signal that you want out, you will be asked to pack your stuff and be escorted to the exit pronto by the security officer.

Anonymous said...

Temasek has a CDF to run portfolio mngt leh....

how to lose....

he look very long term...

remember...he is well proven as a paper general....

cannot go wrong running our funds in modern finance ....

:)

and hes not the first general there...

Anonymous said...

Actually there is a 3rd government agency that has a portfolio invested in foreign assets ( both equities and fixed income ). Our copy machine reporters do not appear to know about this and have not asked what has happened to the $ 25 bio which MAS doled out to external fund managers in an effort to get the biggies to set up shop in Spore for fund management. Will not be surprised if this 3rd portfolio is also down by a couple of bio. At least, MAS can point the finger at the EFM that lost the money. But what consolation is it to us lesser mortals and ordinary privates and LCPs.

skeptic said...

Look! A few years ago, Chee Soon Juan talked about how the lack of transparency at NKF reflected the bigger reality of the Singapore government.

No one listened to him and he was punished for stirring trouble through more defamation suits.

If we lose money now, it is also partly our fault for being obedient soldiers.

"He who would trade liberty for some temporary security, deserves neither liberty nor security."
-Benjamin Franklin

Anonymous said...

Judge a tree by the fruits it bear!

Anonymous said...

"nobody knows where the next deal would be"... double interpretation for this. Haha.