The Government of Singapore Investment Corporation (originally GSIC, now known as GIC) is a private investment company wholly owned by the Government of Singapore.1 Incorporated on 22 May 1981 under the Companies Act, GIC was set up as the government’s principal investment agent. GIC acts as a fund manager that oversees the investment of Singapore’s foreign reserves in long-term, high-yielding assets abroad.2
Reasons for forming GIC
GIC was the brainchild of Goh Keng Swee who was then first deputy prime minister and chairman of the Monetary Authority of Singapore (MAS). It was formed against the backdrop of the rapid growth of Singapore’s foreign reserves in the 1970s.3 The accumulation of reserves was brought about by a set of economic factors that Singapore experienced during that period. These included a high savings rate, strong economic growth, and repeated budget surpluses. Concluding that these factors would remain, the government revised its investment policy. Instead of having MAS invest the bulk of reserves in liquid but low-yielding assets, the government sought to invest the reserves in long-term, high-yielding assets.4
The government wanted the investments to be managed by an indigenous investment agency even though local fund management expertise was still rudimentary. Initially, the government had considered using overseas fund managers but this had been decided against for two reasons. First, a local investment agency would give the government greater flexibility and control over the national reserves. Second, it would develop Singapore’s expertise in fund management.5 The government had envisaged the investment agency as a private company rather than a government body. This set-up would allow the investment company to respond quickly to market forces without the need to seek parliamentary approval for its decisions.6
Founding board of directors
Then Prime Minister Lee Kuan Yew chaired GIC’s first board of directors, with Goh Keng Swee as deputy chairman. The other founding board members were then MAS managing director Lim Kim San, then Minister for Defence Goh Chok Tong, then Minister for Trade and Industry Tony Tan, then Minister for Foreign Affairs S. Dhanabalan, and then chairman of the Public Service Commission Tan Teck Chwee. The first managing director of GIC was Yong Pung How who was then vice-chairman of the Overseas Chinese Banking Corporation (OCBC) before his appointment to GIC.7
Local and overseas offices
GIC started operations in 1981 in the MAS premises located in the original Singapore Airlines (SIA) Building at Robinson Road before moving to the MAS Building in 1985. As GIC expanded, it set up offices in Raffles City Tower in 1987 before relocating to Odeon Tower, then Capital Tower where it remains to this day.8 By 2010, GIC had eight overseas offices in key financial capitals – New York, San Francisco, London, Mumbai, Beijing, Tokyo, Seoul and Shanghai.9 Its latest office opened in Sao Paulo, Brazil, in April 2014.10
GIC portfolio
GIC invests in a wide range of asset classes and instruments worldwide. They include public equities in both developed and emerging markets, fixed income, natural resources, hedge funds, cash and currencies.11 GIC manages assets in excess of US$100 billion, making the company one of the world’s largest sovereign wealth funds.12
Author
Lim Tin Seng
References
1. Tommy Koh et al., eds., Singapore: The Encyclopedia (Singapore: Editions Didier Millet and National Heritage Board, 2006), 220. (Call no. RSING 959.57003 SIN-[HIS])
2. Koh et al., Singapore: The Encyclopedia, 220.
3. Government of Singapore Investment Corporation, Year Book 2001 (Singapore: Government of Singapore Investment Corporation, 2001, 12. (Call no. RSING 332.6735957 GSICYB)
4. Government of Singapore Investment Corporation, Year Book 2001, 12.
5. Government of Singapore Investment Corporation, Year Book 2001, 12.
6. Koh et al., Singapore: The Encyclopedia, 220.
7. Government of Singapore Investment Corporation, Year Book 2001, 13.
8. Government of Singapore Investment Corporation, Year Book 2001, 14.
9. GIC Private Limited, Report on the Management of the Government’s Portfolio for the Year 2012/13 (Singapore: GIC Private Limited, 2013), 54–55.
10. Tee Zhuo, “GIC Opens Office in Sao Paulo,” Straits Times, 4 April 2014, 14. (From NewspaperSG)
11. GIC Private Limited, Report on the Management, 13.
12. Koh et al., Singapore: The Encyclopedia, 220; GIC Private Limited, Report on the Management, 28.
The information in this article is valid as of 12 May 2014 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.
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