GIC

We are a private company wholly owned by the Government of Singapore. It was set up with the sole purpose of managing Singapore’s foreign reserves. The Government, which is represented by the Ministry of Finance in its dealings with GIC, neither directs nor interferes in the company’s investment decisions. It holds the board accountable for the overall portfolio performance.

Although we are government-owned and manage government funds, our relationship with the government is that of a fund manager to a client. We operate, invest and measure our performance in the same way as any global fund management company.

Read more about Singapore’s reserve management framework on the Ministry of Finance’s FAQs on Reserve Management Framework.

Our management reports to our Board of Directors that meets at least twice a year. The Board is ultimately responsible for asset allocation and for the performance of the portfolio under management.

GIC is accountable in various areas to the President of Singapore as a Fifth Schedule company. The Constitution empowers him to obtain information to enable him to safeguard the country’s reserves. No one may be appointed to or removed from the GIC Board without his concurrence. This additional layer of control ensures that GIC only appoints people of integrity who are competent and can be trusted to safeguard the reserves.

We submit our annual budget to the President for his approval. The President also receives GIC’s audited annual accounts and has access to any of the information that is available to the Board.

The Government allocates the funds for GIC to manage. We are not told the source of those funds, and do not own the funds we manage. We manage the funds on behalf of our client - the Government of Singapore.

Our mission is to preserve and enhance the international purchasing power of the reserves placed under our management by the Government of Singapore. The investment objective is to achieve good long-term returns above global inflation for the Government over the investment time horizon of 20 years.

A long-term investment horizon of 20 years gives GIC a competitive edge vis-à-vis other investors, as they have much shorter investment horizons.

GIC to able to achieve better returns for the portfolio as a long-term investor because we can then invest in private market assets such as real estate and private equity which usually give better returns than bonds and public equities but are less liquid. About one-fifth of our portfolio is invested in such assets which require a longer period of time to realise their higher returns.

A long-term investment horizon also gives GIC the flexibility to adopt contrarian strategies in times of market euphoria or panic. We used this flexibility before and during the global financial crisis of 2008/2009. Such strategies would have been hazardous if we were concerned with short-term gains or losses.

Finally, a long-term orientation enables GIC to invest in assets offering higher returns such as emerging market equities but which are prone to short-term volatility.

Our Board approves a policy portfolio which specifies the allocation of funds to eligible asset classes. The policy portfolio is an anchor of GIC’s investment process for allocating and rebalancing exposures to the various asset classes.

We also have a medium-term strategy framework which enables GIC management, with the approval of the Board, to make calibrated departures from the policy portfolio. In this way, GIC can respond more flexibly to significant risks or opportunities, which are likely to emerge from time to time in an environment of greater uncertainty.

GIC has a very strong risk culture which ensures we are not over-invested in any country or sector and thus avoid us having an unbalanced portfolio. By and large, GIC invests where we see good long-term economic opportunities.

Our investment results have been creditable in achieving our investment objective of preserving and enhancing the international purchasing power of Singapore's reserves. To find out more, please access the ‘Report on the Management of Government's Portfolio’ which GIC publishes annually.

As we are managing the foreign reserves of Singapore, in general our investment mandate does not allow us to invest in Singapore dollar assets. Also, we do not hedge our investments against SGD. In deciding what foreign currency to express our investment results in, we have chosen the USD as that is how international investment results are most commonly expressed. Reporting GIC’s performance in USD will also make for more representative comparisons by Singaporeans and the international financial community.

The government wants GIC to focus on the 20-year real returns; how much the Government may take into its annual budget is also based on these returns. Read more about the Constitutional provisions enabling the Government’s budget to draw on a portion of the long-term investment returns.

As 20 years is a rather long period, we have published 5-year and 10-year nominal rates of returns in USD terms to reflect the ongoing medium-term investment performance of the portfolio, but not the real rates of return. At the same time, we are publishing composite global portfolios constructed from appropriate global equity and global bond portfolio indices, so as to provide perspective in assessing the 5-year and 10-year nominal returns figures. We are not providing the 1-year returns as these are too short-term in relation to GIC’s 20-year investment horizon.

The real return does not depend on the currency, unlike our figures on nominal returns which have to be expressed in terms of a specific currency.

Essentially ‘in real terms’ is an attempt to express how much more (or less) the portfolio value is, in terms of the "goods and services", it can buy. We need a common unit of measurement to translate the "goods and services" into a number, that is, a "numeraire" currency. Whether we use USD or SGD as the numeraire is not important because what we are measuring is the number of units of the basket of "goods and services" that may be bought. The real rate of return is the nominal rate of return less the rate of inflation. If we measure the nominal rate in USD terms, the rate of inflation must also be measured in USD terms. If we measure the nominal rate in SGD, the rate of inflation must also be in SGD. The real rate of return will be the same in both cases.

The Government has explained why it will not disclose the Assets Under Management by GIC. Please refer to MOF's website.

We have more than one thousand staff working from 9 offices around the globe.

We have a diverse workforce with staff from more than 35 different countries of origin and every other of our investment professional is a non-Singaporean.

Our employees must embody our 5 P.R.I.M.E values of Prudence, Respect, Integrity, Merit and Excellence. We also look for people with a desire to excel and never stop learning. The way we operate requires our people to enjoy and be good at working with others. We value diversity and hence recruit people from a variety of academic backgrounds: economics, engineering, arts, mathematics, computer science, law.

GIC does have an internship programme which acts as a feeder to our hiring needs. We invite undergraduates in their penultimate year of studies to apply to this programme which runs for about 8 to 10 weeks during the June to August period every year. Participants would typically do their internship at the country where they are studying or in their home country, if these happen to be countries where GIC has an office. Other arrangements may be considered case-by-case.

The selection process involves a number of conversations with our GIC staff across different functions and levels. There is also a couple of assessment activities which we would like you to participate in. These processes are not only meant for us to get to you better to ascertain if you are suitable to work in GIC, but also for you to understand GIC so that you decide if the company suits you. As we look forward to you having a long-term career with us, it is important for you to be yourself when you partake in these activities.