Comprehensive Guide to the Government of Singapore Investment Corporation (GIC)

What Is the Government of Singapore Investment Corporation (GIC)?

The Government of Singapore Investment Corporation (GIC) is a state-owned entity responsible for managing Singapore’s sovereign wealth fund. Established in 1981, it operates under the official name GIC Private Limited. Its primary objective is to invest the nation’s reserves more aggressively across diverse, higher-yielding asset categories over extended time horizons. According to the Sovereign Wealth Fund Institute, GIC ranks as the eighth largest sovereign wealth fund globally, overseeing approximately $390 billion in assets as of mid-2018.

GIC functions alongside two other key financial institutions in Singapore: the Monetary Authority of Singapore (MAS) and Temasek Holdings, forming the triad responsible for managing the country’s reserves.

Key Highlights

• GIC is one of three major financial bodies managing Singapore’s government assets.
• Its core mission is to invest with a long-term perspective to protect and enhance the international purchasing power of Singapore’s reserves.
• Currently, GIC manages assets totaling around US $400 billion.

Insights into GIC’s Structure and Operations

GIC manages funds on behalf of two principal clients: the Government of Singapore and the Monetary Authority of Singapore. While it maintains a conventional corporate framework, GIC is distinguished as a "Fifth Schedule" corporation under Singaporean law. This status requires presidential approval for critical decisions such as appointing or removing directors and senior executives. Additionally, GIC’s financial accounts are audited by Singapore’s auditor-general to ensure transparency and accountability. The board comprises a mix of prominent government officials, both current and former, alongside independent directors from the private sector.

Similar to other sovereign wealth funds, GIC’s portfolio encompasses a broad spectrum of financial assets. Approximately 80% of its portfolio is managed internally, reflecting a strong in-house investment capability. Historically, GIC has maintained a discreet presence but demonstrated opportunistic investment strategies during periods of market stress, such as the 2007-2010 U.S. housing crisis.

GIC’s Investment Performance Overview

GIC maintains confidentiality regarding specific fund details in its annual reports to avoid revealing the full extent of Singapore’s financial reserves, which could invite speculative attacks on the Singapore dollar during vulnerable market periods. Nonetheless, it publishes performance and risk management data over 5, 10, and 20-year intervals.

Over the 20 years ending 31 March 2019, GIC delivered an annualized return of 3.4% above global inflation rates, effectively doubling the international purchasing power of Singapore’s reserves during that timeframe.

Commitment to Santiago Principles

In 2008, GIC collaborated with the Abu Dhabi Investment Authority and the U.S. Treasury to develop the foundational 9 Generally Accepted Principles & Practices for sovereign wealth funds and their host countries. These principles evolved into the Santiago Principles, a voluntary framework of 24 guidelines designed to uphold governance excellence, transparency, accountability, prudent investment, and a stable investment climate. Today, over 20 sovereign wealth funds, including GIC, adhere to these internationally recognized standards.

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