In FY2026, Temasek’s one-year total shareholder return (TSR) was 10.5%. TSR would be 12.9% on a constant currency basis, once you remove the effect a stronger Singapore dollar had on Temasek’s foreign investments.
Even its long and consistent track record has not been enough to satisfy some critics, who point to its lacklustre performance relative to other sovereign wealth funds. Ahead of the latest FY2026 report card, data platform Global SWF ranked Temasek and fellow state investor GIC in the bottom half of its 50-sovereign investor ranking based on 10-year annualised returns in 2025.
When asked, Temasek Global Investments CEO Chia Song Hwee says it would not be fair to make such comparisons given Temasek’s differing mandate and portfolio mix and questions whether ranking exercises provide meaningful insights.
Chia prefers Temasek to be measured against its own mandate: delivering a sustainable level of return over the long term as expected by the government, its sole shareholder, while managing a resilient portfolio.
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“How do we judge whether our portfolio is resilient or not? You have to go through the history to see how many shocks we were able to go through. We cannot avoid a drawdown, but what happens after a drawdown? Were we able to come back up again, and then can we continue to grow from there? I think that is even more important when you look at whether or not the portfolio is delivering returns or not.”
While it is valid to question Temasek’s performance, it is also important to consider the sheer scale of the assets it manages. With a net portfolio value of more than half a trillion dollars, finding investments large enough to move the needle meaningfully becomes increasingly difficult. In that sense, Temasek could be seen as a victim of its own success: its growth and accumulated heft have introduced the challenge of diseconomies of scale.
Scale is not a problem faced by Temasek alone. Famed investor Warren Buffett said last May that he was having trouble sourcing deals, given how Berkshire Hathaway has built up total assets of more than US$1.25 trillion ($1.61 trillion).
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“When I look at the stock market, when I look at companies of a size that would make any difference to our total, I don’t see anything. Well, we’re buying one or two things, but it’s peanuts,” Buffett told CNBC.
This is not a call for Temasek to go out and make high-risk bets like SoftBank. However, it is important to recognise the constraints the state investor faces in generating competitive returns while adhering to its mandate.
Still, Temasek’s push to maintain a 50:50 split between liquid, listed investments and illiquid, unlisted investments is seemingly the right balance. While Temasek’s unlisted positions have generated higher annualised returns than their listed assets over the past decade, those returns have come at the expense of liquidity.
In an increasingly volatile world, liquidity and, by extension, flexibility are strategic assets that should be jealously guarded. Temasek has to adhere to its mandate of delivering sustainable long-term returns, but that does not mean it has to lock itself into illiquid investments. Having the ability to wait does not mean it has to wait.
