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Singapore’s GIC Sees Global Inflation Posing Challenges, ST Says

Singapore’s sovereign wealth fund sees global inflation as biggest threat to its portfolio now, the city’s Sunday Times reported.

Singapore’s GIC Sees Global Inflation Posing Challenges, ST Says
Shophouses and skyscrapers in the central business district of Singapore. (Photographer: Ore Huiying/Bloomberg)

Singapore’s sovereign wealth fund sees global inflation as the biggest threat to its portfolio now, following the crisis triggered by the pandemic, the city’s Sunday Times reported, citing the chief executive officer.

“Turns out that way more than temporary supply chain issues, demand-led inflation is turning out to be the worry,” GIC Pte CEO Lim Chow Kiat said in an interview with the newspaper. “Since GIC’s formation, we never saw inflation causing a problem. This crisis is not over.”

GIC needs to find assets that generate returns higher than global inflation, said Lim, 51, who has been the CEO of the wealth fund since January 2017.

The fund has been building up its exposure in private equity and Lim said the next wave of investment opportunities will probably be in climate change-exposed assets. The fund is also interested in blockchain technology and the prospects of tokenization being applied to mainstream financial markets.

Citing estimates from Global SWF, a portal that tracks 430 sovereign wealth funds and public pension funds, GIC returned 37.5% in the year to March 2021. That outperformed peers such as Japan’s Government Pension Investment Fund and the Canada Pension Plan, the newspaper said.

Global SWF approximates GIC’s assets under management at $744 billion.

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