Highlights

Performance

GIC achieved a 20-year annualised rate of return of 3.7% above global inflation for the financial year ended 31 March 2017.

We have taken a relatively cautious portfolio stance due to a combination of stretched valuations, high policy uncertainty and unresolved economic imbalances. GIC’s focus is to own assets at reasonable prices, with long-term earning potential.

Appointments

We welcome Mr Mark Kritzman and Dr Mohamed El-Erian who were appointed to our International Advisory Board on 1 April 2017. We also welcome Mr Lam Kun Kin who joined us on 1 September 2016 on the GIC Risk Committee.

Five new senior leadership appointments took effect from 2017.

Outlook

Valuations remain high across most major asset classes. Given the expectation of modest economic growth and earnings, this portends low returns over the next decade. The current investing environment features considerable uncertainty. GIC's response has been to build a diversified and resilient portfolio to ensure capital and returns can be best protected over the long term.

Overview from the Chief Executive Officer

GIC continues to deliver on its mission to preserve and enhance the long-term international purchasing power of the reserves placed under its management. We do so by focusing on owning assets with long-term earning potential at reasonable prices and with due regard to risk. For the year ended 31 March 2017, we achieved a 20-year annualised rate of return of 3.7% above global inflation.

Investment Report

GIC’s mandate is to achieve good long-term returns over global inflation. 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:
Investing in a Highly Uncertain Environment

The current investing environment features considerable uncertainty. GIC’s response has been to build a diversified and resilient portfolio to ensure capital and returns can be best protected over the long term.

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.

The GIC Board is responsible for the Policy Portfolio which determines GIC’s long-term asset allocation and is accountable to the Government for the overall performance of the portfolio.

The GIC Management is responsible for formulating and executing investment strategies and for individual investments. The Management also reports to MOF on the risk and performance of the portfolio.

Our People

GIC is a global long-term investment organization. We are headquartered in Singapore with offices in 10 cities staffed by more than 1,400 people of over 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 long-term orientation.

Respect

All of us are united in a common endeavour, regardless 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 Client or of GIC.

We stress teamwork within and across departments, and with our Client 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 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.

Client First

  • When our Client does well, we do well
  • Never compromise our PRIME values and reputation; not even for better returns
  • Always follow GIC’s investment principles:
  • 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