Government Of Singapore Investment Corporation (GIC)

Exploring the Government of Singapore Investment Corporation (GIC)

Unveiling the GIC: A Sovereign Wealth Fund Overview

The Government of Singapore Investment Corporation (GIC) stands as a cornerstone in managing Singapore's sovereign wealth fund, officially known as GIC Private Limited. Established in 1981, the GIC was tasked with the strategic investment of the nation's financial assets to achieve higher yields over an extended time horizon. As of mid-2018, it ranked among the top sovereign wealth funds globally, boasting $390 billion in assets under management.

Key Takeaways

• The GIC, one of Singapore's reserves management entities, oversees the nation's financial assets.
• With a focus on long-term investments, the GIC aims to preserve and augment the international purchasing power of the funds it manages.
• Currently, the GIC commands approximately US $400 billion in assets under its management.

Demystifying Sovereign Wealth Funds (SWFs)

Understanding the Inner Workings of the GIC

As a key player in Singapore's financial landscape, the GIC serves two principal clients: the Government of Singapore and the Monetary Authority of Singapore. Despite its corporate structure, the GIC operates uniquely under Singaporean law, requiring approval from the President for pivotal decisions and undergoing audit by the government's auditor-general. Notably, its leadership comprises both government officials and independent directors from the private sector.

Exploring GIC Investment Performance

While the GIC refrains from disclosing precise fund details to safeguard against market speculation, it shares performance metrics over various timeframes. Over a 20-year period ending in March 2019, the GIC achieved an annualized return of 3.4% above global inflation, effectively doubling the international purchasing power of the reserves.

Navigating the Santiago Principles

In 2008, the GIC joined hands with other sovereign wealth funds to develop the Santiago Principles, a set of guidelines aimed at fostering transparency, accountability, and prudent investment practices. Upholding these principles, the GIC, alongside other member funds, contributes to maintaining a stable and open investment climate globally.