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GIC to increase exposure to US-focused funds, says FT

Felicia Tan
·2-min read

As at March 31, 2022, about 37% of GIC’s portfolio is in the US, three percentage points up from the 34% in the year before.

GIC is seeking to increase its exposure to US-focused funds, says the Financial Times.

In a June 21 article, the daily broadsheet says that GIC, whose assets have been estimated to cross US$700 billion ($940.96 billion), has put more money into the US via venture capital funds and technology companies.

The US tech sector took a hit in 2022 with shares in tech companies falling by more than 30%, outpacing the overall market’s average of a 20% decline. The tech-focused NASDAQ was down by over 33% during the year.

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To this end, the paper sees GIC’s focus on the US as one that reflects positivity for the country’s tech sector. GIC's funding in venture capital groups also comes despite a drop in venture capital funding. According to an April 3 article by Bloomberg, funding from venture capital groups fell for 13 straight quarters, reaching a low of US$37 billion in 1Q2023.

GIC’s interest in the US comes in contrast to its investments in China, which have been slowing down, according to data provider ITjuzi. According to data from Refinitiv, while GIC signed 63 deals that involved US-based private companies in 2022 and 2021, 61.5% higher than the 39 deals that were signed in 2019 and 2018, ITjuzi noted that GIC made two direct investments in Chinese companies in 2022, down from the 16 deals in 2021.

The Financial Times, in its Feb 14 article, also noted that the sovereign fund is said to be scaling back on its investment commitments to China-focused private equity.

According to the paper’s sources, a venture capitalist that has offices in Silicon Valley said that it has spoken to GIC about raising its commitments to US funds.

As at March 31, 2022, about 37% of GIC’s portfolio is in the US, three percentage points up from the 34% in the year before. During the same period, GIC’s second-highest concentration is in Asia ex-Japan region at 25% of the sovereign fund’s portfolio.

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