Temasek bets big on Betashares with $300 million investment

By Our Reporter
Temasek CEO Dilhan Pillay Sandrasegara. Under Sandrasegara’s leadership, Temasek has maintained robust long-term returns, with a 20-year annualised total shareholder return of about 8%

Singapore’s investment giant, Temasek, has made a significant move by investing $300 million in Betashares, a leading provider of exchange-traded funds (ETFs) in Australia. This marks Temasek’s first venture into the Australian financial services market, showcasing its confidence in the sector’s growth and potential. The exact size of the stake acquired by Temasek remains undisclosed, but this strategic investment underscores Temasek’s ongoing commitment to diversifying its portfolio and tapping into promising markets.

Betashares, established in 2009, has quickly risen to become one of the largest local providers of ETFs in Australia, managing around $38 billion in assets. With a headquarters in Sydney and additional offices in Melbourne, Brisbane, and Perth, Betashares offers a wide array of innovative financial products that cater to over one million investors and thousands of financial advisers across the country. Notable offerings include the A200 ETF, known as the world’s lowest-cost Australian shares index ETF, the NDQ ETF, which provides exposure to the top 100 non-financial companies listed on the NASDAQ, and the HACK ETF, dedicated to leading companies in the cybersecurity sector.

Temasek, founded in 1974 by the Singaporean government, operates independently from the state despite being wholly owned by the Singaporean Ministry of Finance. With a net portfolio value of approximately S$403 billion (around US$300 billion) as of March 2023, Temasek’s investments span a broad spectrum of industries, including financial services, telecommunications, media and technology, transportation and industrials, consumer and real estate, life sciences and agribusiness, and energy and resources. Initially focused on Singapore, Temasek’s portfolio now boasts a significant global presence, particularly in Asia, North America, and Europe.

Guided by themes such as transforming economies, growing middle-income populations, deepening comparative advantages, and fostering emerging champions, Temasek places a strong emphasis on sustainability. The firm integrates environmental, social, and governance (ESG) factors into its investment decisions and aims to achieve carbon neutrality by 2030. This commitment to sustainability is reflected in its diversified holdings, including stakes in major companies like Singapore Airlines, DBS Bank, and Singtel, as well as innovative sectors and firms such as Moderna.

Led by CEO Dilhan Pillay Sandrasegara since April 2021, Temasek continues to operate with high standards of corporate governance and transparency. The company publishes an annual review that details its financial performance, portfolio, and key activities. Under Sandrasegara’s leadership, Temasek has maintained robust long-term returns, with a 20-year annualised total shareholder return of about 8%. The firm’s strategic investments extend to influential global entities, including Alibaba Group and other leading technology companies worldwide.

Temasek’s decision to invest in Betashares aligns with its strategy to diversify and support leaders in various fields. Betashares’ impressive growth and performance in the Australian ETF market make it a compelling choice for Temasek. Betashares has been at the forefront of launching innovative financial products, such as the world’s lowest-cost Australian equities ETF and the first ETFs in Australia for the NASDAQ-100 Index and global cybersecurity sector. The company also offers ethical ETFs like the Global Sustainability Leaders ETF (ETHI) and the Australian Sustainability Leaders ETF (FAIR), which adhere to stringent ESG criteria.

Betashares’ substantial market presence and trust among investors are evident through its management of over $38 billion in assets. The company’s robust team of over 135 employees is dedicated to various aspects of fund management, customer service, and innovation. This workforce drives Betashares’ mission to provide accessible and cost-effective investment solutions to a wide range of investors, from individuals to large financial institutions.

Temasek’s investment in Betashares is a testament to its belief in the potential of the Australian financial services sector. This move also highlights Temasek’s strategic approach to identifying and nurturing high-growth opportunities in markets that align with its long-term investment philosophy. By partnering with Betashares, Temasek not only gains a foothold in the Australian market but also aligns itself with a company that has demonstrated a consistent ability to innovate and lead in the ETF space.

As Temasek continues to explore new investment opportunities, particularly those aligned with sustainable growth and technological advancement, its partnership with Betashares is likely to yield significant benefits. This investment reflects Temasek’s broader strategy of building a resilient and diversified portfolio that can withstand market fluctuations and deliver long-term value to its stakeholders.

In addition to its investment activities, Temasek is deeply involved in community engagement through the Temasek Foundation, which supports a range of initiatives in community development, education, healthcare, and the environment. This commitment to social responsibility complements its investment philosophy, further enhancing Temasek’s reputation as a forward-thinking and socially conscious investor.

Temasek’s extensive network and strategic investments make it a significant player in the global investment landscape. Its investments contribute to the economic growth and development of the regions in which it operates, underscoring the firm’s influence and reach. The partnership with Betashares is a clear indication of Temasek’s confidence in the Australian market and its potential for future growth.

Looking ahead, Temasek is poised to continue its trajectory of identifying and investing in high-potential opportunities worldwide. Its focus on innovation, sustainability, and strategic growth positions it well to navigate the evolving global economic landscape and deliver sustained value to its portfolio and stakeholders. The $300 million investment in Betashares is not just a financial commitment but a strategic move that aligns with Temasek’s vision of fostering growth and innovation in key markets around the world.

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