March 13 (Bloomberg) -- Government of Singapore Investment Corp., which manages more than $100 billion of reserves, operates without “political meddling” from the city-state’s authorities, an adviser said.
The sovereign wealth fund’s biggest investments include Citigroup Inc. and UBS AG, according to data compiled by Bloomberg. The investments are made for the long term, said Ng Kok Song, who retired as GIC’s group chief investment officer in January.
“Of course the government is concerned about our investment policy, our investment strategy,” said Ng, who invested the nation’s reserves in the past four decades and remains an adviser at GIC. “But when it comes to particular investments, we operate at arm’s length from the government. And that’s very important because when there is political meddling, then you compromise, you do things for non-commercial reasons.”
GIC’s 20-year annualized real return was 3.9 percent as of March 2012, unchanged from the previous year. That meant the government’s fund manager generated that return over the past two decades on top of the global inflation rate, Josephine Teo, minister of state for finance, said in Parliament today.
The annualized nominal rate of return in U.S. dollar terms was 3.4 percent over five years, 7.6 percent over 10 years and 6.8 percent over 20 years, GIC said in July. The fund doesn’t report an annual return or disclose the size of its portfolio.
The fund boosted its cash in the year ended March 2012 to levels exceeding the 2008 global financial crisis as it pared stocks and bonds, reducing its holdings in Europe. Cash allocation almost quadrupled to 11 percent of its portfolio, while stocks fell to 45 percent from 49 percent as it pared equities in developed markets. Bonds dropped to 17 percent from 22 percent, according to GIC.
GIC is owned by Singapore’s government and manages the country’s foreign reserves. The fund’s aim is “to achieve good long-term returns” for the government, according to the fund’s website.
Ng spoke at an Investment Management Association of Singapore conference in the city-state today.
--Editors: Linus Chua, Andreea Papuc