Singapore’s state investment firm Temasek Holdings has adopted a more cautious stance toward Europe, citing rising global trade tensions and tightening financial conditions just a year after launching its much-celebrated Paris office and pledging billions in regional investments.
Despite a public commitment to deploy up to S$25 billion (US$19 billion) in Europe over five years, Temasek is now concerned that European multinationals may be disproportionately vulnerable to ongoing disruptions in global trade, particularly those stemming from U.S. protectionist policies.
“There is a sense of elevated trade uncertainty, which could impact the growth trajectory of Europe,” said Lim Ming Pey, joint head of corporate strategy at Temasek. She also pointed to tightening credit conditions in Europe, though she noted that easing inflation may allow the European Central Bank to maintain accommodative interest rates.
Temasek, one of the world’s largest institutional investors, reported a portfolio value of S$434 billion (US$339 billion) as of March 2025 — an 11% increase from the previous year. The growth was fueled by gains in China, the U.S., and India, while its European exposure dropped to 12%, down from 13% last year.
The shift comes despite Temasek’s significant European holdings, which include a 17% stake in UK-based Standard Chartered, 6% in Dutch fintech company Adyen, and 3% in German pharmaceutical giant Bayer. These investments were historically aligned with Temasek’s preference for global companies headquartered in developed markets, where domestic growth is often seen as limited.
The more bearish European outlook marks a stark contrast from June 2024, when Temasek inaugurated its Paris office in a high-profile ceremony attended by current Singaporean Prime Minister Lawrence Wong and France’s then-Finance Minister Bruno Le Maire.
Still, the firm maintains that its long-term European investment plans remain on track. Chief Investment Officer Rohit Sipahimalani affirmed Temasek’s commitment to the region, despite shorter-term headwinds.
As it reassesses Europe, Temasek is ramping up efforts to deepen its footprint in the Middle East. Rather than deploying its own capital directly, the investor is encouraging its major Singaporean portfolio companies to explore acquisitions, joint ventures, and partnerships in the Gulf region. The strategy aims to navigate the region’s already capital-rich environment, dominated by sovereign wealth funds.
Temasek’s Singaporean assets include major stakes in DBS Bank (29%), Singapore Airlines (53%), and full ownership of state utility SP Group. Subsidiaries Mapletree Investments and Seviora recently expanded their global reach by opening offices in Abu Dhabi, further signaling the firm’s growing interest in the Middle East.
The investor also disclosed a 5% annualized return over the past decade and a 7% return over the past 20 years. Unlisted assets now account for 49% of Temasek’s portfolio — slightly down from 52% — after it marked up their value by S$35 billion. Temasek has been actively acquiring stakes from other investors seeking liquidity, especially in high-quality private assets.
Founded in 1974 to manage Singapore’s state-owned assets following a wave of privatization, Temasek has since transformed into a globally active investment powerhouse. Its latest strategic moves reflect a nuanced response to geopolitical shifts, balancing risk and opportunity across a complex investment landscape.
