8/1/2013 06:04:48 AM

Temasek Readies for International Push with US Veteran Hire

A Singapore sovereign wealth fund has appointed a former World Bank President to its board, as it ramps up its reputation ahead of an American office launch.

(August 1, 2013) -- Temasek has appointed Robert Zoellick to its board of directors, a man who formerly held the post of World Bank President and worked as a US Trade Secretary.

Zoellick was president of the World Bank from July 2007 until June last year. Prior to this, he served as the US trade representative in 2001 to 2005, during which America signed a free-trade agreement with Singapore: its first in Asia.

The Singaporean sovereign wealth fund is understood to be making efforts to ramp up its international reputation ahead of an office launch in the US.

 “Zoellick is probably the most high-profile person that Temasek has engaged and that says a lot about their global ambitions,” Wai Ho Leong, an economist at Barclays in Singapore told Bloomberg.

“It’s potentially significant, depending on what they do with that. It’s extending their feelers, at the very least, in the US space.”

Lim said in a statement on Temasek’s website: “[Zoellick] brings a wealth of experience in international business, diplomacy and finance that will be both welcome and valuable on our board.

“His appointment also comes at an opportune time, as Temasek sets out to establish its first US office in the near future. Bob’s insights will be especially helpful as we continue to explore opportunities in US, Europe and also in the various growth markets.”

In the same statement, Zoellick praised the sovereign wealth fund for its “strong corporate governance principles” and underlined his high regard for Singapore as an international finance and business hub.

Temasek’s portfolio covers a broad spectrum of industries and has produced a total return since inception in 1974 of 16% compounded annually in Singapore dollar terms, or 18% in US dollar terms.

The company has had a corporate credit rating of AAA/Aaa since its inaugural credit score in 2004, by Standard & Poor's and Moody's respectively.

In related news, Moody’s Investors Service has declared that the assets contained in the sovereign wealth funds of all of the countries composing the Gulf Cooperation Council (GCC) except for Bahrain now exceed government liabilities.

GCC countries’ assets have recovered well after the oil shock of 2009, reaching an aggregate $1.6 trillion in assets at the end of 2012 (equivalent to 107% of the aggregate GDP), up from $1 trillion in 2007.

This growth in sovereign wealth fund assets has reinforced Moody's assessment of GCC governments' financial strength, given they could be tapped if the world experienced a sharp decline in hydrocarbon prices.

However, other than Saudi Arabia, which reports its reserve assets on a timely basis, the lack of transparent and timely reporting by other sovereign wealth funds in the region makes Moody’s Investor Services concerned, adding a degree of uncertainty to assessing the credit profiles of GCC countries.

Related Content: New Leader for Singapore Sovereign Wealth Fund and Interactive Map Created By SWF Institute  

Contact the writer of this story:Charlie ThomasCharlie ThomasAssistant European Editor, aiCIO(44) 207 397 3827cthomas@assetinternational.comFollow on Twitter at @ai_CIO