The evolution of sovereign wealth funds: Singapore's Temasek Holdings

Purpose – Where there has been little in-depth understanding of sovereign wealth funds, the purpose of this paper is to describe the complex nature of one of the world's largest sovereign wealth funds, Temasek Holdings (“Temasek”), whose “active” investment strategy has been emulated by a number of other funds. Design/methodology/approach – The paper draws mainly on public data in developing a case history of Temasek. Findings – Based on this data, the paper suggests how the firm's underlying strategy seems to be about pursuing the national interests of its sovereign shareholder in both a commercial and non-commercial manner. Research limitations/implications – Consistent with a case-based approach, the paper presents a single example of a sovereign wealth fund. Practical implications – The aggressive manner in which Temasek has built up its international portfolio coupled with the mixed impact of its “active” investment strategy raise a number of issues about the nature of an important sovereign wealth fund. Originality/value – The value of the paper is in its cogent, insightful picture of the development of a sovereign wealth fund that was a pioneer of this phenomenon.