Singapore Temasek plans to undertake its largest reform in years, potentially splitting its business "into three."

Singapore's state-owned investment firm Temasek Holdings is considering one of the most significant business reforms in decades, planning to restructure its vast investment portfolio into three independent business units in order to improve investment returns and streamline operations.

According to media reports on the 20th, this proposal, which is still under discussion among the company's senior management, plans to split Temasek's business into three main parts: one focusing on its largest domestic holdings such as Singapore Airlines, another responsible for overseas investments, and the third covering all fund investment operations.

Despite Temasek's net asset portfolio reaching a historic high of SGD 434 billion (USD 338 billion) as of March 31 this year, its 10-year total shareholder return is only 5%, which is on par with its larger but more conservatively managed peer GIC, and significantly lagging behind the MSCI World Index's annualized return of 10% during the same period.

The reform plan could be announced as early as the next few months, with the new chairman Chia Song Hwee officially taking office on October 9. The Singapore Formula 1 Grand Prix in early October is seen as a good opportunity to explain the changes to partners and stakeholders.

Performance Pressure Drives Structural Adjustment

Temasek currently employs a traditional management model, with different executives responsible for various asset classes and regional investments. Sources indicate that if the restructuring plan is implemented, it will allow key executives to focus more on improving the company's performance and operational efficiency.

According to Temasek's 2025 review, as of March this year, Singapore's domestic portfolio companies accounted for 41% of its net asset portfolio value, global direct investments accounted for 36%, and "partnerships, funds, and asset management companies" accounted for 23%. The proposed restructuring essentially follows this existing division structure.

Under CEO Dilhan Pillay, Temasek has faced pressure on investment returns in recent years. Its 10-year total shareholder return not only matches that of GIC but also significantly lags behind global stock market benchmarks, highlighting the urgency for structural reform.

Acceleration of Asset Management Business Integration

In some of the discussed proposals, Temasek's investments with external management firms such as Avanda Investment Management will be reintegrated and may be placed under the Seviora Group. Seviora is a wholly-owned asset management company established by Temasek in 2020.

Seviora currently acts as a holding company, managing investment departments including FCL Holdings, Azalea Investment Management, and SeaTown Holdings International.

Starting next month, Seviora will be led by Gabriel Lim. Lim is a seasoned civil servant who previously served as the permanent secretary of Singapore's Ministry of Trade and Industry and joined Temasek last October as co-head of corporate strategy.

The restructuring plan will also elevate several key executives to senior positions, each responsible for the operations of the newly established departments. Besides Lim from Seviora, other executives mentioned to lead the new departments include Chief Financial Officer Png Chin Yee and Nagi Hamiyeh, who has been reassigned to the Paris office as head of Europe, the Middle East, and Africa business Informed sources emphasize that the plan is still fluid and may change. Temasek has not yet responded to requests for comments. If this restructuring is approved, it will mark Temasek's choice to reposition its investment strategy and operating model through structural reforms in the face of changes in the global investment environment and shareholder return expectations