Singapore sovereign wealth fund ready to invest more

GIC is the world's fourth largest sovereign wealth fund.

The Government of Singapore Investment Corporation Private Ltd (GIC) is the single biggest shareholder of UBS (6.45%) and holds a minority stake in Citigroup.

It was established by the Government of Singapore in 1981 to manage Singapore's foreign reserves. GIC has some US$250 billion in assets under management.

GIC unveiled a new structure for organizing its holdings. It has grouped them into two portfolios: a policy portfolio and an active portfolio.

The policy portfolio will generate the bulk of its risk and returns. It will mainly invest in equities with a smaller allocation for bonds, cash and real estate.

The active portfolio will include a wider mix of asset classes. It is expected to generate the bulk of returns. It is GIC’s attempt to do better than the policy portfolio through skill-based strategies.

GIC said its annualized nominal rate of return over the last five years to March 2013 was 2.6% in U.S. dollar terms, down from the 3.4% it reported last year.

GIC Chief Investment Officer Lim Chow Kiat said UBS and Citigroup have seen an improvement in their profits and GIC is happy with the shift the banks have made to their business models.

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