Singapore state-owned investment firm Temasek expects alternative assets to be “an important return driver for us in the years ahead” as part of its strategy to diversify beyond traditional equities.
In its 2025 review, covering the financial year to 31 March 2025, Temasek revealed that one of its three areas of focus within alternative assets is private credit and “hybrid solutions”.
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“This fills the void for underserved borrowers who are, for various reasons, not covered by traditional credit providers such as banks,” Temasek said.
“Borrowers also find private credit financing increasingly appealing as it can offer them a more flexible and tailored solution.”
The firm highlighted Aranda Principal Strategies, its private credit platform which was spun out from its in-house credit portfolio team last year to “better capture opportunities” in the credit space.
Aranda manages a $10bn (£7.3bn) dollar portfolio comprising both direct investments and funds, and which Temasek said it expects to grow “over time”.
As part of its allocation to alternatives, Temasek invests in top-tier private equity funds, such as EQT, KKR, and TPG, as well as in other alternative strategies and hedge funds, “which generate resilient returns through uncorrelated strategies like closed block insurance and music royalties”.
Alternative investments sit within the firm’s partnerships, funds and asset management companies (PFAs) segment, which comprises 23 per cent of its overall portfolio.
Within the PFAs segment, partnerships and funds constitute more than two-thirds, with asset management companies making up the remaining one-third of the segment.
Temasek added that global investors have been deploying a “significant amount of capital” into alternatives in recent years.
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