Seatown Holdings launches with USD$3 billion in Singapore
Singapore investment fund Temasek Holdings has set up a new investment company called Seatown Holdings. According to the statement, Temasek’s senior managing director and chief strategist Charles Ong will be the chief executive of the new company. Mr Ong said Seatown is a global investment company, wholly-owned by Temasek Holdings. It is not immediately clear how Seatown’s mandate will be different from Temasek’s own investment role. Remember, Temasek’s investment mandate is to protect the monies of Singapore, including the pension monies (CPF) of its residents. Temasek set up Fullerton Fund Management a few years ago to manage 3rd party money. I suppose the real question to ask is how different would Seatown be from Fullerton Fund Management’s mandate. Or even, how different is it from GIC’s mandate? Some news reports say that in addition to investing the city-state’s own assets, Seatown will eventually open its doors to Singapore’s citizens, allowing them to co-invest with the sovereign fund.
I did some research and found a flowchart from this blog, where the author interpreted the money flow within this organisation. See the chart below (click on it for a larger version).
A spokesman said he had no further details beyond the statement. Temasek said it has seconded a small core team and is still in the process of building up the Seatown team. Earlier, Dow Jones reported that the new company will have an investment capital of around US$3 billion and would focus on investments in emerging markets with an emphasis on Asia.
Update: April 2011
It’s already doing deals. Seatown jumped in alongside its parent when the latter invested more than $600 million in convertible preferred shares of Chesapeake Energy Corp. of Oklahoma City. It also invested when Temasek bought shares in Chinese pork producer China Yurun Food Group Ltd. And the new fund firm is actively engaged in Asian debt markets, where its sheer size and ample dry powder make it one of the biggest investors in a region where other debt funds have less uninvested cash to play with. This plays to the strengths of Mr. Ahmad, a veteran of Credit Suisse Group and former hedge fund manager with a background in credit.
Seatown is the latest in a string of investment vehicles Temasek has helped bring into being. It provided about US$800 million in capital to Hopu Investment Management Co., making it the US$2.5 billion China-focused private equity firm’s largest investor. Hopu is run by Richard Ong, a former banker at Goldman Sachs Group Inc. and brother to Charles Ong of Seatown, and Fang Fenglei, chairman of Goldman’s joint-venture securities firm in China. Charles was formerly Temasek’s chief strategist and, before that, its chief investment officer.
Mr. Israel said that while it’s still early, Temasek is satisfied with the results of Seatown’s investments. He said the aim is for Seatown to manage money for institutional investors in three to five years, with the possiblity of letting retail investors in possibly in eight to 10 years, after one or two market cycles have put the company to the test.
Update: August 2011
Charles Ong and Nasser Ahmad, co-chief executive officers of Seatown Holdings, are leaving the hedge fund set up by Singapore’s Temasek Holdings.