highlights of gic annual report 2013/2014

Highlights of GIC Annual Report 2013/2014

Steady Long-Term Performance

*For period ended 31 March 2014

• Rolling 20-year real rate of return

• Reflects our mandate to preserve and enhance the international

purchasing power of the reserves placed under our management

over the long term

Primary metric to evaluate investment performance

0

1

2

3

4

5

6

7

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

%

4.1% real return

per year over 20 years

GIC has sustained steady long-term investment

returns on the foreign reserves



Return & volatility of the GIC & Reference Portfolios

Annualised nominal return (USD)*

Annualised volatility*Time Period

GIC Portfolio

Reference Portfolio

GIC Portfolio

Reference Portfolio

5-year

10-year

20-year

12.4%

7.0%

6.5%

13.9%

6.7%

7.2%

10.1%

10.2%

9.1%

11.6%

11.8%

10.8%



31 March 2014 (%) 31 March 2013 (%)Asset Mix

Developed Markets Equities

Emerging Markets Equities

Nominal Bonds & Cash

Inflation-linked Bonds

Real Estate

Private Equity

100 100TOTAL

29 36

19

31

5

7

9

17

29

2

8

8

Mix of growth and defensive assets


Portfolio Composition

42%

29%

27%

AMERICAS

EUROPE

ASIA

2%AUSTRALASIA

Broad geographical diversification

*As of 31 March 2014


31 March 2014 (%) 31 March 2013 (%)Geographical Distribution

Americas

Europe

Asia

Australasia

100 100TOTAL

United States

Latin America

Others

Others

Eurozone

United Kingdom

Others

North Asia

Japan

34

4

4

42

8

14

7

29

10

14

3

27

2 2

36

4

4

44

8

11

6

25

10

13

5

28

3 3

Geographical Distribution

*As of 31 March 2014


0

0.05

0.1

0.15

0.2

-20 -15 -10 -5 0 5 10 15 20 25 30

Simulated Annualised Returns (%)

Simulated 5- and 20-year annualised real returns of the Reference Portfolio

5-year Annualised Real Returns 20-year Annualised Real Returns

• Wide dispersions of returns

• Narrower dispersion for

longer horizon

Prospects of Investment Returns

REFERENCE PORTFOLIO

Passive Portfolio; set at 65% global equities; 35% global bonds

Represents the government’s risk level

+ =

Allocation among six core asset

classes

Key driver of returns over the

long term

Approved by the GIC Board

Comprises overlay of active,

skill-based strategies

Adopted by GIC management

Overseen by GIC Investment Board

Represents actual exposures of the

GIC portfolio

Within risk limits set by

Government

Investment Framework

Private Equity

Real Estate

Inflation-linked bonds

Nominal bonds & cash

Developed Market equities

Emerging Market Equities

11%-15%

9%-13%

4%-6%

25%-30%

20%-30%

15%-20%

Policy Portfolio

Asset Class Highlight

Private Equity • Enables diversification• Better long-term returns, albeit with highest risk, among the major asset

classes

Developed Market Equities

Emerging Market Equities

Nominal Bonds

CashInflation-linked Bonds

Real Estate

Private Equity

0.0%

2.5%

5.0%

7.5%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

Ex

pecte

d R

etu

rn

Expected VolatilityLow

Hig

h

High

Lo

w


Our Approach to PE • A long-term investor like GIC can afford to ride through the higher

volatility of PE in return for a higher expected long-term return• We began investing in PE in 1982; currently we have > 100 manager

relationships and >100 investee companies• Our PE investments have done well, outperforming public equities since

introduction

We are one of the largest and most established PE investors globally because:• We have strong relationships with a number of top quartile managers.• We have the capabilities to source and lead deals for direct investments in

companies across multiple industry sectors.


Connect with us on

LinkedIn at https://www.linkedin.com/company/gic for

updates on our investment news, corporate initiatives and

insight into our company culture,

or find out more at www.gic.com.sg.

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