It came as a surprise to learn that the Singapore Government Investment Corporation does not manage the C.P.F money that is collected from the Singaporean work force.
From a South China Post Report of 6 June 2001,[Quote]:
Senior Minister Lee was at pains to stress that
GIC fund managers did not manage CPF funds. That surprised academics in the field, who have long assumed CPF funds and fiscal reserves are essentially interchangeable because both are invested in government-linked companies and schemes.
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http://www.singapore-window.org/sw01/010606sc.htmIn another report in Agence France Presse of 22 May 2001, both DPM and SM were recorded defending the Government's position in employing high paying staff and confirming that G.I.C funds are placed in safe investments by a team of well paid local and foreign staffs:[Quote]:
In a speech May 22 at the opening of the new GIC headquarters, the deputy premier said the corporation was among the 100 largest fund management companies in the world and 40 percent of the staff handling the secret reserves were foreigners.
"It will never have enough talented Singaporeans to meet GIC's needs. For the best possible performance, GIC must assemble the strongest international team it can find," he said.
"Non-Singaporeans and Singaporeans alike are recruited, evaluated and compensated competitively based purely on performance. "
Lee Kuan Yew defended the salaries paid to fund managers, which can include bonuses of up to five million US dollars, saying they were "worth every dollar that we pay them."The fund managers were being paid on a par with Singapore's top companies, aside from an annual bonus based on performance and long-term incentives such as stock options.
"If you don't pay such officers, you won't get them. They are precious commodity," he said.
About half of the funds managed by GIC have been invested in North America, about a quarter in Europe and the balance spread over Japan and emerging markets.
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We go in for safe investments," he said, adding that emerging markets might offer higher rewards but also greater risks.
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http://www.singapore-window.org/sw01/010522a1.htmIn another research made by Asia Times published on 19 July 2001, the following information is enlightening when we have little information from the Singapore Government:[Quote]:
The GIC was set up in 1981 to manage the country's foreign reserves which are said to exceed S$181 billion (US$100 billion) July 19 - one of the highest in the world - thanks
to the country's high savings rates. It is a private limited company (PLC), wholly owned by the government, and comes under the purview of the Ministry of Finance.].
But it is no ordinary PLC.
The law [color=red]exempts it from filing balance sheets, profit-and-loss statements, publish annual reports or report to parliament[/color]. It is only accountable to the accountant-general, auditor-general and the president, to whom it submits its financial statements and proposed budgets.
The special PLC is chaired by the elder statesman Lee Kuan Yew, while his son, the deputy premier, Lee Hsien Loong, is the second-in-charge.
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The GIC invests half of its funds in global equities, 30 percent in bonds, 10 percent in real estate, 5 percent in venture capital funds and 5 percent in cash instruments.
The GIC claims its funds not only outperform global benchmarks such as the Morgan Stanley Capital World Equities Index, but its real rate of return always exceeds the G3's (US, Japan and Germany) average inflation rate of 5 percent. But this still begs the question, why does it refuse to disclose its returns if the performance is so spectacular?
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The GIC was said to be one of the single largest creditors of China's Guangdong International Trust & Investment Corporation (GITIC) and
it lost about S$200 million when GITIC collapsed in 1999 with about US$3 billion of debt. In 1996, a GIC officer was involved in a scandal for accepting S$2.4 million in bribes offered by a US fund manager to buy shares in various public-listed companies, although he was later acquitted on appeal. The GIC was
also rumored to be involved in tie-ups with hedge-fund manager Long-Term Capital Management before its collapse in late 1998.
The GIC's discretion might be for political purposes.
It is, after all, one of the region's largest property owners with assets including the AT&T Corporate Center in Chicago, 70 Grosvenor Street in London, the Grand Millennium Plaza in Hong Kong and the International Broadcast Center in Sydney - home of the Sydney Olympics. GIC Real Estate - the company's property-investment arm - is said to have invested in 120 properties in more than 25 countries worldwide. But the total asset value has not been revealed.
The GIC might be inviting political resistance if it bangs the gong every time a deal is sealed. Not least in neighboring Malaysia where it is said to own M$870 million (US$230 million) worth of listed assets and properties. This is despite its recent disposal of stakes in Malaysia Pacific Industries (MPI) - part of the Hong Leong Industries, and Mesiniaga - the distributor of IBM products in the country.
Its largest investment in Malaysia is believed to be the 362 million ringgit stake in Sunway City, a popular theme park and shopping mall located on the outskirts of the capital Kuala Lumpur.
The GIC is also reported to have stakes in at least another 11 companies listed on the KLSE, including KFC Holdings Malaysia, Star Publications, the New Straits Times Press, Tanjong, Resorts World, Berjaya Sports Toto, Public Bank and AMMB Holdings. Have you noticed the common threads in these investments? The hiccups in Malaysia-Singapore bilateral relations have been largely over some trivial matters or sibling rivalries - except the touchy racial issue. It is no wonder that expansion of Singapore's business empire into these Chinese-owned companies in Malaysia has gone largely unnoticed.
The GIC is also one of Asia's largest private equity investors, with an estimated S$9.1 billion-S$18.2 billion invested in 150 private equity funds worldwide, reports the Straits Times
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http://www.singapore-window.org/sw01/010719at.htmIf the CPF money collected each month from a working population of more then 2.5 million Singaporeans are not managed by G.I.C, then a pertinent question need to be asked as to which Government Agency is responsible for putting the CPF money to good use ?
If the supposedly safe investments of Singapore Reserves are so well managed by highly paid, capable, and experienced Fund Managers - both Singaporeans and Foreigners, will it not be logical to place CPF funds with the same group of Fund Managers ?
If the professional Fund Managers can outperform the G3 inflation rate of 5% per annum, will this not allow the CPF account holders to receive a better interest return on CPF savings than what is currently paid at less then 2% per annum ?