This article is featured in the 2024 FCLTGlobal Blue Book, a collection of real-world examples of how our members are putting long-term strategies into practice today. We hope that these practical illustrations will inspire others to embrace the mission of focusing capital on the long term. Learn more >>

As Singapore’s sovereign wealth fund, GIC is responsible for safeguarding and enhancing the international purchasing power of the reserves under our management over the long term. We can only fulfill this mandate with the help of our many partners, including external fund managers, peer investors, investee companies, service providers, and community organisations such as FCLTGlobal. GIC believes that deploying long-term capital and embracing global partnerships are key strategies for both earning good, risk-adjusted returns and contributing to a better future. 

Partnerships built on a long-term commitment 

Our partnership approach is characterised by a long-term mindset that prioritises collaboration over transactions, right from the start. Despite continued volatility in the economic landscape, we believe that investing is not a zero-sum game and that there are ample opportunities for investors and businesses to co-create value and generate returns, even in highly fragmented markets. GIC adopts a mindset of being fair, friendly, and firm with all of our partners. It’s an approach we take seriously, apply across all geographies and asset classes, and hope to pass down from generation to generation.  

Infrastructure investments offer a prime example of how long-term capital and partnerships can contribute to supporting economies, while also bringing measurable benefits to an investor’s portfolio. Infrastructure businesses require consistent, long-term investments to serve their communities effectively. They also rely on committed partnerships with financial backers and governments to address challenges and keep essential services functioning well. Over more than a decade, infrastructure has become a significant part of GIC’s total portfolio, with investments in companies that deliver critical services such as airports, seaports, electricity utilities, renewable energy generation, fibre networks, telecommunication towers, and others.  

Life-cycle collaboration 

Our long investment horizon offers greater certainty to our partners to commit to innovative ventures which may take time to see results. The willingness and ability of long-term capital to support a company’s growth over an extended period, along with the trusted partnership between investors and investees, equip companies with the confidence to continue developing across cycles. GIC’s investment in a sanitation company in South America exemplifies how local communities can benefit from long-term capital. For over a decade, GIC’s investment has helped the firm expand its coverage of clean water and proper sewage services from 2 to 31 million people and create employment opportunities for vulnerable communities. These efforts contributed to restoring the environment by reducing raw sewage discharges and reducing hospital admissions for water-borne diseases by 80 percent. 

Long-term capital can likewise be crucial to catalyse innovation in the early days of a company’s life cycle. For example, GIC’s investment in a US firm developing a multi-day energy storage solution is helping to accelerate the transition to a cleaner, more reliable, and cost-effective grid. Although long-duration energy storage might be a relatively new area of innovation, it is critical in addressing the intermittency of renewable power generation, potential grid outages, and extreme weather events. By building its first manufacturing facility on the site of a former steel mill, the company is also taking a significant step towards transforming a former coalmining and steel-producing community into a clean energy hub. 

Reliable and responsive co-investor 

Having a long history of co-investing with select external managers and direct investing capability positions us well to respond to co-investment opportunities, especially across real estate, private equity, credit, and infrastructure. Typically, our partners source attractive opportunities via their own networks, with us supporting part of the required capital through responsive due diligence, clarity of decisions, fair terms, and additional research. In recent years, we have extended more co-investing invitations to our partners, thus expanding the opportunity set further. 

Synergies through multi-faceted investment partnerships 

We prefer to do more with long-time partners both in size and dimensions. For example, we may have multiple asset-class exposures to the same external manager, while for investee companies, we can be their shareholder, bondholder, and even landlord or joint-venture partner. Such partnerships are often strengthened through varied collaborations tapping the full scope of our organisations’ talents and resources. 

Constructive engagement 

Long-term capital also supports companies in making deep transformations, including the transition to more sustainable business practices, which will affect the longer-term prospects of assets and companies. We do this in a way that recognises the respective dynamics of the markets that they operate in, rather than imposing a “one-size-fits-all” approach. For instance, GIC’s investment in a US utility firm has enabled the company to start transitioning its power generation fleet towards cleaner fuel sources, with the goal of retiring all coal-fired power assets by 2035. It’s an example of how investing in the responsible retirement of carbon-intensive assets, rather than simply divesting, can be more effective to accelerate the decarbonisation of the real economy.  

Providing long-term capital can deliver super-charged growth, particularly when it addresses the challenges posed by emerging mega-trends. However, deploying long-term capital well requires global partnerships, including governments, external fund managers, peer investors, investee companies, service providers, and community organisations. By expanding our investment universe, widening our perspectives, and leveraging each other’s unique capabilities, these partnerships enable us to generate good, risk-adjusted returns, while solving complex issues and investing in the foundations of a better tomorrow. 

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