Transcription
Do you want Temasek to invest or not to invest?
[laughter]
So, sometimes Temasek is criticized for for for being too dominant in the local stock exchange. So, you have to decide which is which. But, we do uh look for good companies and we do invest in good local companies as well. Investing has always been difficult because you want us to take a disciplined approach to investment and risk. If you are not prepared to take any risk, you sit at home, you put the do the equivalent of hiding your money under the bed, you also are making a decision in a way by doing nothing. Your returns are not going to be very good necessarily. It doesn't mean that everything that we invest in will return us give us fantastic returns. We may make uh losses as well because things may not turn out the way that the assessment at the time uh investment was made. So, that's part of investing.
Uh So, uh the difference today is that geopolitics have entered into this field. We have um investments in the US, we have investments in India, we have investments in Europe, we have investments in China. And each of these markets is impacted in a different way by the geopolitical events. So, we have to be quite aware of what's happening and uh take those into account uh when we invest. And of course, we have to balance our portfolio in such a way where we have enough liquidity to ride through these uh crises.
But, the several themes which we've been investing in for uh and which we will continue to do so include the digital economy. So, AI for example. And then uh health care, longevity, uh these are sort of secular trends, which are not going to change. Uh, then we have uh, sustainability. Sustainability have been given a boost because now people are looking for alternatives to uh, fossil fuels for resilience, rather than for sustainable and climate change reasons.
AI, for example, we invest in AI companies. We invest in companies which uh, uh, not just develop LLMs and so on, but uh, we also in uh, look for companies which are going to be strong in the applications of AI. So, we look for companies which uh, from their market positioning and from the way that they have been able to use AI uh, creatively in that market segment, [clears throat] they are able to create value and they will disrupt others. And we try to avoid those who will be disrupted, but there are also companies which are um, uh, providing hardware. Uh, there are companies which are providing power. There's a rather large stack there in which you can invest in in uh, meaningfully and in a way which is uh, which may not get so caught up in a geo- geopolitical arguments. You know, just like we have internet-native companies which came out of nowhere and became very large companies. We will have AI-native companies which come out of nowhere and create uh, new lines of businesses and services which they can provide.
We have an investment in a company uh, uh, in the UK which um, specializes in doing uh, simulations. And building digital models of physical systems. They use AI in a different way. And this helps companies uh in product in in design of uh complicated products uh which require analysis of uh fluid flows, fluid dynamics, materials, and so on. And to improve and cycle through more quickly what are the designs which are uh more likely to succeed. And to be able to do that without necessarily having to create a physical uh prototypes. If our companies here in our ecosystem in Singapore uh are able to tap on these kinds of technologies, uh then our industries here can cycle much faster, develop new products, uh sort of test them using these AI-created models uh in a much more rapid and efficient way.
India is an important market to us. I was in India uh in December last year. I met some of the key leaders in India. We have significant investments in India in several sectors. Um healthcare, for example, there's growing domestic demand for good healthcare in India, and we are invested in that space. Uh one of the companies that we invested in uh is going to IPO soon. Consumer demand also is growing very rapidly. Uh and as you know, in India, we have a number of investments in logistics and transportation. Uh we have investments in Mumbai port, and these are through our portfolio companies. In Mumbai port, in airlines, um in telecommunications. These are fairly major uh investments. And uh we are also have investments again through our portfolio companies and also directly uh in uh renewable energy.
Our investments in China have continued to grow. Even though as a percentage of the portfolio, it has become smaller. And that's because we've been deploying capital in other attractive markets as well. We continue to deploy capital into China. Its percentage as a percentage of um domestic portfolio has [clears throat] come down. We expect it to stay roughly where it is today. Where we've deployed capital has changed. Uh in the early years, it was the banks and then some of the well-known uh uh digital companies in in China. And now we're looking at different opportunities in China. Uh like where AI applications will grow into, where drug discovery will grow into, uh uh the new consumer areas in China. We took some of our portfolio companies also uh to China just about a month ago to see what they are doing. And they have very strong uh application-based users for AI. So, robotics, industrial automation, and so on. And also it's an opportunity for our investment folks to have a look at what what is happening in this area.
The approach that I have always taken to uh climate change is this. We are neither zealots nor are we skeptics. We're realists. We look at the data. We look at what's possible. And we invest in that direction. Recently, uh with the situation um for oil and gas from the Gulf, there's another good reason to want to invest in these types of renewable energies and so on because it provides you greater resilience as well. You can rail against it if you want to, but uh nature is not listening. It has its own timetable. And you can see that happening.
On the healthcare side, we're looking at drug drug and drug discovery, for example. Uh but we're also looking at uh the demands of of for healthcare among growing population and growing middle class in many of these countries. So, as hospitals, drug discovery, uh diagnostics, a whole range of things. I visited a Swiss drug company, well-known one, and they have already started doing using AI to help them in their drug discovery. So, identification of diseases, identification of the targets, uh the design of the drugs, and so forth. And they said the most valuable data they have they have 100 years' worth of data, and they're ingesting them in into their system. But they didn't come to the point where they produced uh efficacious safe drug. But that body of data is very valuable to them because it helps them to identify which drugs are not likely to work, so they don't have to spend money and resources and time on them. So, this is one example, and you know, we we look for insights like this to invest in the various companies.
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