Highlights

Performance

GIC achieved a 20-year annualised rate of return of 4.0% above global inflation for the financial year ended 31 March 2016.

High valuations, together with limited improvement in the outlook for economic growth and earnings globally, mean lower returns are to be expected over the next decade.

Appointments

Mr Koh Boon Hwee was appointed member of the GIC Investment Board with effect from 15 January 2016.

Seven new senior leadership appointments took effect from 1 June 2016.

Outlook

Looking forward, we expect a difficult investment environment with modest growth prospects, greater uncertainty and a high degree of volatility in the macro economy and markets.

The long-term 20-year returns in the coming years are likely to be significantly lower than seen since 1980. Nonetheless, our investment philosophy, governance framework, organizational capabilities and market network, all carefully developed over the last 35 years, leave us well-placed to invest in this new environment.

Overview From Group President & Group Chief Investment Officer

We are 35 this year. Still young. But in the Singapore context the anniversary is significant, particularly as it comes so soon after celebrating 50 years as a nation – a landmark that has sparked a major retrospective on what has driven our country’s extraordinary rise.

Investment Report

GIC’s mandate is to achieve good long-term returns. The primary metric for evaluating GIC’s investment performance is the rolling 20-year real rate of return. The goal is expressed in real terms because GIC must, at a minimum, beat global inflation and preserve the international purchasing power of the reserves placed under its management.

Feature article:
Preparing for a low-yield environment

We expect a difficult investment environment with modest growth prospects, greater uncertainty and a high degree of volatility in the macro economy and markets. The long-term (20-year) returns in the coming years are likely to be significantly lower than what we saw since 1980. Nonetheless, our investment philosophy, governance framework, organizational capabilities and market network, all carefully developed over the last 35 years, leave us well-placed to invest in this new environment.

Managing the Portfolio

GIC’s investment strategy is to build a portfolio comprising asset classes that generate good real returns over the long term, while adhering to the risk tolerance outlined by our client.

Governance

The Government, represented by The Ministry of Finance (MOF), sets the investment objective, risk parameters and investment horizon for the portfolio. It also ensures a competent board of directors is in place.

Our people

GIC is a global organization headquartered in Singapore, with offices in 10 cities staffed by more than 30 different nationalities.

The GIC primer

Our responsibility is to preserve and enhance Singapore’s foreign reserves. People and talent are central to what we can do. We believe that the results we seek are best achieved through a culture founded on our five PRIME values of Prudence, Respect, Integrity, Merit and Excellence.

Prudence

We exercise prudence and sound judgement and take a considered approach to managing risks as we seek to deliver sustainable, superior investment returns, always conscious of our overriding fiduciary responsibility.

As an institution and as individuals, we conduct ourselves with good sense and circumspection, even as we take the best advantage of our large asset base, global presence, multi-asset approach and longterm orientation.

Respect

All of us are united in a common endeavour, regard less of who we are, where we work or what we do. We respect people as individuals, care for their well-being, and welcome diversity in capability and background. We do not tolerate behaviour that works against the interest of our clients or of GIC.

We stress teamwork within and across departments, and with our clients and business partners. We expect everyone to be free, candid and constructive in their comments and suggestions, and always seek to help our colleagues and GIC do better.

Integrity

Everything we do is founded on integrity. We expect the highest standards of honesty from everyone in GIC, both in our work and in our personal lives. This includes abiding by the laws of the countries we invest in, and observing our code of ethics in letter and in spirit.

We must never jeopardise the trust others have in us and in our reputation for professionalism.

Merit

We recruit and develop our people solely on merit. We draw our talent from around the world and provide challenging and meaningful work. We grant recognition and reward based on performance and conduct consistent with our PRIME values. We develop our people to achieve their potential so that we may also perform to our potential.

We select business partners based on their capability. We believe in long-term relationships built upon high levels of performance and quality of service.

Excellence

We are relentless in our pursuit of excellence. In all that we do, we strive to be the best that we can be. This demands that we plan and anticipate well, so that we will always be in time for the future, fully able to take up the challenges and opportunities that come, pursuing improvements where they may be found, and economies where these may be gained.

We expect everyone to do his best in every situation. We harness the creativity and imagination of our people and our business partners for sustainable, superior results.

The GIC Way

The GIC Way is a set of principles that defines the way we think and act. It sharpens our focus on our client, our commitment to people and our future. The PRIME Values act as our compass – having a good compass enables us to get back to our fundamental purpose and beliefs, especially when we are faced with situations we have not come across before.

Clients first

  • When our clients do well, we do well
  • Never compromise our PRIME values and reputation; not even for better returns
  • Always follow GIC’s investment principles (5Ps):
  • Pursue intrinsic value and maintain price discipline
  • Practise long-term investing
  • Pick our spots: be focused and leverage our strengths
  • Pay attention to risk control
  • Prepare for the future

People – the key

  • Do what’s right, not what’s easy
  • Help GIC make the best decisions. Speak up if you have a different view
  • Attract exceptional people and develop them to their full potential
  • Embolden innovation and encourage learning
  • Reward what matters: contribution; not pedigree, age, gender or nationality
  • Excel in what you do; make a difference
  • Empower decision-making at every level
  • Work seamlessly across boundaries and hierarchy — OneGIC

Future now

  • Tomorrow is determined today
  • Build leadership and resources for the future
  • Insist on nimble and responsive structures and processes