Temasek's transformation under Ho Ching into more than a global investment giant

SINGAPORE – A leader’s lasting value is measured by succession. So said American author John C. Maxwell.

As any keen watcher of Singapore would know, succession planning has been a cornerstone of the Republic’s success. In fact, it is embedded in the leadership culture of Singapore.

Ms Ho Ching’s retirement from the helm of Temasek Holdings and its board on Oct 1 will be in keeping with this practice.

Her successor, Mr Dilhan Pillay, 57, is a known entity. The Singaporean Anglo-Chinese School alumnus established a strong track record as a successful corporate lawyer at WongPartnership, where he was talent-scouted by Temasek some 10 years ago.

After a two-year stint as head of Americas, based in New York, he was appointed chief executive of Temasek International in 2019, managing the investment and portfolio activities of Temasek. The passing of the baton will no doubt be the hottest talking point in corporate Singapore circles this week.

Ms Ho, 67, who took the helm of Temasek in 2004, is one of the most enigmatic corporate personalities in Singapore. Some, of course, also took exception to the fact that the Prime Minister’s wife was also heading the country’s sovereign wealth fund.

Never mind that she grew Temasek from a passive custodian of some $90 billion in 2004 to become one of the biggest global investment powerhouses, overseeing a portfolio of over $306 billion at last count.

Of course, there were several well-publicised failures, not least of which was the attempted purchase of Thailand’s Shin Corp. But that was due to politics within Thailand, not the quality of the Shin Corp asset.

There were also several other investments around the world that went sour. Show me an asset manager who hasn’t lost some serious money, and I’ll show you a snowy day in Singapore.

But under Ms Ho, Temasek became increasingly transparent.

Despite being an exempt private company which does not need to disclose its numbers to anyone but its single shareholder (that is, the Singapore Government), Temasek started publishing its detailed annual report 16 years ago.

Anyone with time to go through a Bloomberg terminal can find out, to the nearest cent, the exact value of Temasek’s investments, gains, losses and overall portfolio.

Ms Ho also ensured Temasek – and corporate Singapore – has a heart.

Using her bully pulpit, she prompted corporate Singapore to take on issues of environment, social responsibility and governance (ESG) seriously.

The establishment of Temasek Trust and Temasek Foundation as the organisation’s philanthropic platforms to support public good and social causes was a clear signal to corporate Singapore, and especially the “big boys”, about where their hearts should be.

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Are there areas where Ms Ho could have done better? Of course.

Perhaps one area is the rejuvenation – or lack thereof – of the boards of its local conglomerates. One need not search deeply to conclude that some of these boards could do with younger, more energetic and more forward-looking personalities.

Perhaps her reluctance to move aggressively was reflective of her more evolutionary approach to management.

Despite wielding veto power, she is known for her consultative style where everyone at the table gets heard. Investment managers are allowed to articulate and justify their calls.

Some insiders compare this to the “partnership” style practised in big law firms.

Perhaps one of her biggest achievements was recognising the potential power of corporate China and its capital markets very early on.

As Temasek’s CEO, she made a strategic decision to take stakes in China’s four biggest banks. And together with that, she facilitated a process for boards and management of these corporations to come to Singapore to learn, be exposed and exchange ideas on how global corporate leadership operates and how global capital markets work.

Several thousand Chinese corporate chieftains have gone through the “Singapore School of Management” since then. And in the process, Temasek helped build a huge reservoir of goodwill within corporate China towards Singapore.

Mr Pillay will have huge shoes to fill.

Unlike Mr Chip Goodyear, who was brought over in 2009 and did not last very long, Mr Pillay is a known entity at Temasek.

He has been a team member and been by Ms Ho’s side as the figurative “last man in the room”.

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While the direction is likely to be similar, with the emphasis on ESG and sustainability intact, there could be a nuanced shift in investment emphasis.

Mr Pillay takes over at a time of massive technological disruption, compression of the tech cycle and uncertainties in global supply chains.

Last year, Temasek emerged as the top global tech investor, investing around US$2.3 billion (S$3 billion) in tech-related sectors like e-commerce and life sciences, according to Global SWF.

Temasek also extended its portfolio into urban farming and spent US$365 million in acquiring an 85 per cent stake in Israel’s Rivulis Irrigation, which applies smart technology to agricultural systems. Other allocations included United States-based Impossible Foods and Australian start-up V2Food, which help drive ethical consumer food choices.

In all, Temasek deployed over US$11 billion in total last year, the world’s fifth biggest investor.

Given where technology is heading, investments in this arena could become Mr Pillay’s major focus in the years ahead.

But Mr Pillay is also a builder of platforms or companies.

He was the chief architect behind the restructuring of the four big “Singapore Inc” property portfolios of Jurong, Ascendas, JTC and CapitaLand. He is widely credited with spearheading the creation of Surbana Jurong.

Under his leadership, more of these scaleable platforms could be created to seek out global opportunities for Singapore.

Given the mega-trends and global changes swirling around the world, it is timely for fresh perspectives and a younger pair of hands at the helm. Mr Pillay, at 57, fits the bill well.

A hallmark of a good CEO is knowing when to let go for the betterment of the organisation. On that score, Ms Ho has done well. And she is also sticking to the Singapore succession culture.

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