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With large investments in the UK property sector, GIC could be the most exposed Asian state investor following the exit of Britain from the European Union, reported Reuters.
According to the Sovereign Wealth Fund Institute (SWFI), the Singapore fund manages US$344 billion in assets. Of this, seven percent, or around US$24 billion, is invested in the UK.
GIC began aggressively buying up property in the West following the 2008 Global Financial Crisis, with London emerging as one of its most favoured destinations.
In fact, GIC has secured at least three big-ticket deals in the UK in the last three years. This includes the £1.7 billion purchase of Blackstone’s stake in the Broadgate office and retail complex in London in 2013.
In 2015, GIC was one of the institutional investors that acquired 33 percent of the combined businesses of Three and O2 UK from Hutchison Whampoa Ltd for £3.1 billion.
A source familiar with the fund’s thinking said while GIC has been monitoring the Brexit scenario for more than a year, it takes a much longer view of its investments.
For instance, GIC would consider factors like the role of London as a financial centre 20 years from now, said the source.
GIC, which manages the foreign exchange reserves of Singapore, looks to beat global inflation. In the 20-year period that ended March 2015, its portfolio generated an average annual real return of 4.9 percent above global inflation.
GIC said it has prepared itself for a period of heightened market uncertainty. “What’s most important to us is that markets remain open,” said GIC Deputy President and Group Chief Investment Officer, Lim Chow Kiat.
At a separate event in Singapore, Leslie Teo, Chief Economist at GIC, gave an optimistic view on investment strategy post-Brexit.
“If you have…some modestly long horizon…the world is not ending. Therefore, markets are going to push things down, there will be opportunity,” he said.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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