Temasek has unveiled a sharper investment strategy centred on artificial intelligence, infrastructure and private credit after reporting a record S$518 billion portfolio. The Singapore state investor is doubling down on long-term structural growth while maintaining flexibility amid an increasingly complex global environment.
Temasek has posted a record net portfolio value (NPV) of S$518 billion for the financial year ended Mar 31, 2026, marking a year of stronger returns, accelerated capital deployment and a more focused investment strategy aimed at positioning the state investor for the next decade of growth.
The investment company reported a one-year total shareholder return (TSR) of 10.5 per cent, driven primarily by strong performance from its Singapore-based portfolio companies and gains from strategic divestments, including the S$6.6 billion sale of ST Telemedia’s remaining stake in its global data centre business.
During the financial year, Temasek invested S$51 billion while divesting S$31 billion, resulting in a net investment of S$20 billion—double the pace of capital deployment compared with the previous year. The increased activity reflects growing conviction in long-term structural opportunities despite persistent geopolitical and macroeconomic uncertainty.
Chief executive officer Dilhan Pillay described today’s operating environment as a “polycrisis” rather than simply one characterised by volatility and uncertainty, noting that Temasek is positioning its portfolio to withstand multiple simultaneous disruptions while continuing to deliver sustainable long-term returns.
AI, infrastructure and private credit become strategic priorities
At the heart of Temasek’s investment strategy is a plan to significantly increase exposure to three areas it believes offer compelling long-term returns: artificial intelligence (AI), core-plus infrastructure and private credit.
By 2031, Temasek aims to increase AI-related investments to up to 15 per cent of its portfolio, from around 6 per cent currently. Core-plus infrastructure exposure is targeted to rise from 1 per cent to 5 per cent, while private credit allocations will increase from 2 per cent to 5 per cent.
Collectively, these three sectors are expected to account for around a quarter of Temasek’s portfolio by the end of the decade.
Chief investment officer Rohit Sipahimalani said AI continues to underpin global capital expenditure alongside themes such as defence, energy security and electrification. However, he stressed that the firm remains disciplined in balancing growth opportunities with portfolio resilience.
Temasek views AI not as a standalone trend but as the next phase of digitalisation that has been shaping its investments since 2016. Rather than focusing solely on AI developers, the investment company plans to deploy capital across the entire AI value chain, including semiconductors, cloud infrastructure, energy infrastructure, foundation models and enterprise software.
Recent investments in OpenAI and Anthropic reflect this strategy, while AI exposure is also expected to grow organically as existing portfolio companies adopt AI technologies across their businesses.
Management emphasised that the 15 per cent AI target remains directional rather than fixed, with investment pace depending on valuation levels and market opportunities.
More concentrated investments with larger commitments
Temasek is also refining how it invests globally.
Instead of pursuing a broad range of smaller investments, it is increasingly focusing on fewer, larger deals where it can build deeper sector expertise and maintain stronger strategic influence.
Over the past year, the firm added investments in AI companies OpenAI and Anthropic, alongside consumer-focused businesses including China’s Luckin Coffee and Italy’s Ermenegildo Zegna Group.
According to Temasek Global Investments president Nagi Hamiyeh, investment teams are being encouraged to concentrate on a smaller number of sectors while deploying larger amounts of capital into businesses where the firm has greater conviction.
Consumer resilience remains another important investment theme, alongside emerging opportunities in areas such as defence and deterrence.
Portfolio built around three complementary pillars
Temasek has reorganised its investment platform into three distinct business segments.
The largest segment remains Temasek Portfolio Companies (TPCs), representing 43 per cent of portfolio value. These Singapore-rooted businesses collectively generate approximately S$200 billion in annual revenue and employ more than 400,000 people globally.
Beyond providing capital, Temasek works closely with these companies on board development, leadership succession, AI adoption, operational transformation, workforce reskilling and sustainability initiatives.
Global Direct Investments (GDI) account for 38 per cent of the portfolio and include investments in emerging and established global market leaders. During FY2026, Temasek invested S$37 billion and divested S$24 billion within this segment.
Listed assets now represent 63 per cent of GDI holdings, giving Temasek greater liquidity and flexibility while continuing to maintain significant private market exposure.
The remaining 19 per cent comprises Partnerships, Funds and Asset Management, which includes Temasek Partnership Solutions and Seviora Holdings. This platform enables co-investments, private equity partnerships, secondaries and private credit investments while expanding Temasek’s global asset management capabilities.
The roughly 40-40-20 portfolio allocation has remained largely consistent since 2018, with each segment generating 10-year internal rates of return between 7.6 and 8.1 per cent.
Infrastructure and private credit provide resilience
Alongside AI, Temasek sees infrastructure and private credit as increasingly attractive in an environment characterised by higher inflation, energy transition and growing demand for digital infrastructure.
Infrastructure investments are expected to benefit from ageing power grids, renewable energy expansion, nuclear energy, battery storage, decarbonisation technologies and AI-driven data centre growth.
Meanwhile, Temasek’s private credit portfolio has expanded from an initial S$10 billion to more than S$13 billion, generating over S$1 billion in annual recurring income.
The firm focuses on senior secured lending across corporate financing, asset-backed lending and real estate credit, viewing private credit as an asset class offering attractive risk-adjusted returns, downside protection and reliable cash flows.
Unlike many private credit funds facing redemption pressures, Temasek invests entirely from its own balance sheet, allowing it to maintain a significantly longer investment horizon without liquidity constraints.
Strong performance despite global headwinds
Although the portfolio benefited from robust investment performance, geopolitical tensions and currency movements weighed on overall returns.
Conflict in the Middle East reduced portfolio value by approximately 2 per cent during the final month of the financial year, while the stronger Singapore dollar lowered reported one-year TSR by around two percentage points.
On a constant currency basis, Temasek’s one-year TSR would have been 12.9 per cent, or 14.8 per cent when measured in US dollars.
Longer-term returns remain resilient, with TSR standing at 7.1 per cent over 10 years and 6.8 per cent over 20 years, reflecting Temasek’s emphasis on sustainable long-term performance through market cycles.
The investment company also ended the financial year in a net cash position, providing significant flexibility to capitalise on future market dislocations and emerging investment opportunities.
As global markets continue to evolve amid technological disruption and geopolitical uncertainty, Temasek’s strategy signals a more concentrated investment approach centred on long-term structural themes while maintaining the resilience needed to navigate an increasingly complex investment landscape.