Temasek plans to invest up to $40b in US over next 5 years

NEW YORK — Singapore state investor Temasek plans to invest up to US$30 billion (S$40 billion) over the next five years in the US in sectors such as healthcare, financial services and technology.

"It's an incredibly deep and broad capital market in the US," Jane Atherton, Temasek's head of North America, told Reuters. "The US is really at the forefront of everything that's happening from the AI perspective."

The US economy grew faster than expected in the second quarter and continues to outperform its global peers. Despite recent turbulence, the S&P 500 is up 14.5 per cent this year in a rally driven in part by excitement over artificial intelligence.

In contrast, China reported weaker-than-expected growth earlier this month and surprised markets by cutting major short- and long-term interest rates last week in a bid to boost its economy.

About 22 per cent of Temasek's investments are in the Americas, or US$63 billion, and 19 per cent in China. Its exposure to the Americas surpassed China in the last financial year for the first time in a decade.

In the US, Temasek is particularly interested in areas related to artificial intelligence, such as data centres, semiconductors and battery storage, Atherton said.

Temasek said earlier this month that profits from investments in the US and India were helping cushion underperformance in China. Temasek also said it is taking a cautious approach to China amid trade tensions.

"Geopolitics always plays a role," Atherton said, while noting that China has underperformed the rest of the world and particularly the US over the past three years.

Temasek manages a US$288 billion portfolio focused on long-term investments with themes such as digitisation and sustainability.

Atherton said most of the future performance of US stocks will rely on earnings, especially for the tech megacap sector.

"You've seen some multiple expansion, but that's been driven by higher growth, and in theory it'll pay for it," she said.

Temasek is also looking for investments in both public and private markets, as more private equity firms seek to divest.

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