The Sovereign Wealth Funds of Singapore

Anthony Elson

Published: September 2008

This paper examines the origin, evolution and recent operations of Singapore’s two sovereign wealth funds, Temasek Holdings (TSK) and the Government Investment Corporation (GIC). Singapore is a unique case in that it has two of the oldest and largest sovereign wealth funds. Both funds reflect a long history of sound macroeconomic fundamentals and strong fiscal discipline on the part of the Singapore government. The two funds have significantly different operating features and governance structures. TSK operates like an equity investment firm with significant independence in its day-to-day operations from the government and a relatively high degree of transparency; by contrast, GIC operates like an asset management company, under tight control by the government and with a relatively low degree of transparency. The paper concludes with some lessons from Singapore’s experience with its sovereign wealth funds for the on-going debate about the role of such funds in the international financial system.

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