Singapore’s state investment company, Temasek, is planning a substantial investment of up to $30 billion in various sectors in the United States within the next five years. This investment will primarily target industries like healthcare, financial services, and technology.
According to Jane Atherton, Temasek’s Head of North America, the decision to invest in the U.S. is driven by the country’s robust and diverse capital market. Atherton highlighted that the U.S. is a global leader in technological advancements, particularly in artificial intelligence.
Despite recent economic challenges, such as trade tensions, the U.S. economy has shown resilience and exceeded growth expectations in the second quarter of 2024. This performance has contributed to the S&P 500’s 14.5% increase this year, partially fueled by the excitement surrounding artificial intelligence.
In comparison, China, as the world’s second-largest economy, experienced lower-than-anticipated growth in its second-quarter report. To stimulate its economy, China surprised the market by reducing major short- and long-term interest rates last week.
Temasek’s investment distribution currently allocates 22% in the Americas (equivalent to $63 billion) and 19% in China. Notably, the exposure to the Americas surpassed China in the previous financial year for the first time in ten years.
In the U.S., Temasek is keenly interested in AI-related sectors like data centers, semiconductors, and battery storage, as outlined by Atherton. The company stated that its profits from U.S. and India investments have offset the underperformance experienced in China recently, and it remains cautious due to ongoing trade tensions.
Atherton emphasized the significance of geopolitics in investment decisions, noting that China’s performance has lagged behind the U.S. and other global counterparts over the past three years. With a portfolio worth $288 billion focused on long-term ventures in digitization and sustainability, Temasek anticipates that future U.S. stock performance will heavily rely on earnings, particularly within the tech megacap sector.
Furthermore, Temasek is exploring opportunities in both public and private markets, aligning with the trend of increased divestment by private equity firms in the current investment landscape.
