Ensuring long-term sustainability is therefore an important way for us to fulfil our responsibility. Working with investee companies to adjust to technology advances: We share our connections and insights, and work with our existing investee companies to evolve with and adapt to new realities. Interest payments can be made monthly, semi-annually, annually or compoun… Our approach to risk management is multipronged: Managing portfolio investment risk to ensure that risk taken is consistent with our mandate and commensurate with expected returns; Managing legal, regulatory, and compliance risks to safeguard the reputation and interests of GIC and our Client, and to comply with applicable laws and regulations; Managing tax risk to ensure compliance with the tax laws of applicable jurisdictions; Managing operational risk through an effective system of internal controls and processes to support GIC operations; Managing cyber security, technology and information risk to ensure that our technology resources and information are well-protected; Managing counterparty credit risk to minimise the impact to GIC if any counterparties were to default; This multipronged approach to risk management, complemented by the three lines of defence, ensures that risks within the portfolio are looked at in a comprehensive manner. Disciplined and judicious portfolio managementIt is important to ensure that ongoing management of investment portfolios is disciplined and based on good analysis and judgment. Through the Policy Portfolio and Active Portfolio, the GIC Portfolio is diversified across asset classes, with each carrying a different risk and return profile. This means putting more capital in areas where we think GIC has better access to market opportunities, better understanding and ability to structure and manage the investments, and greater confidence that our investment theses will play out. Encouraging responsible consumption: We do this by cutting down on the use of non-recyclable materials, reducing energy consumption through technology and staff behaviours, and improving the environmental footprint of our office spaces. Actively managed portfolios are reviewed regularly in light of changing market conditions and developments in our active management capabilities. Market Disruption and Other Special Circumstances. Estimate how much today's savings could be worth in 10 or 15 years. GICâs BCM programme was established in 1999. For the GIC portfolio as a whole, this means achieving good long-term returns over 20 years while limiting potential downside over the shorter term. Through the diversity of asset classes, the Policy Portfolio is expected to generate good risk-adjusted returns over a 20-year period. For example, new investment products or strategies are subject to a risk identification and assessment process conducted by a cross-functional group. All GIC staff are expected to act with integrity and exercise sound judgement; they need to understand, evaluate, and carefully manage the risks that they take. This includes: Investing in rising stars with long-term potential: New technological trends will bring about many promising entrants. GIC’s investment strategy is to build a portfolio comprising asset classes that can generate good long-term returns above global inflation, while adhering to our Client’s risk parameters. When it became clear that the spread of COVID-19 was escalating, we were able to respond swiftly by implementing the precautionary measures in our plans, including split operations and large-scale telecommuting, without compromising our operational capabilities significantly. The Reference Portfolio characterises the Client’s risk appetite, while the GIC Board approves the Policy Portfolio that is designed to deliver good, long-term returns. Intrinsic Value based on Median EV / EBIDTA Model : Rs. Having learnt from the experience of the 2003 SARS outbreak, our Business Continuity Management (BCM) team had put in place a detailed plan to respond to an infectious disease outbreak. Policies and procedures are established to safeguard the physical security and integrity of GICâs technology and data assets. 3Policies, guidelines, and control processes are in place to reduce the likelihood of significant losses. 2. The Active Portfolio aims to add value to the Policy Portfolio through skill-based, active strategies, while preserving the exposure to systematic market risks. We focus on owning assets with good long-term earning potential, at reasonable prices. The investment business is not immune from the same offence and defence considerations. We ensure that tax-related decisions are handled with professional skill, care and diligence, and with the relevant documentation that evidences the facts, considerations and decisions taken. The approach with this is usually to create a GIC ladder. The Reference Portfolio is not a benchmark, but an expression of the overall risk that the Client is prepared for the GIC Portfolio. While risks remain, they are well-identified and managed within an established risk tolerance. This enhances corporate resilience and safeguards the groupâs operations. For example, the group-wide investment approval framework sets out the approving authorities for investments based on size. Additionally, the Investment Board ensures that GIC takes into account potential reputational risks arising from investment activities. As a long-term investor, we position our portfolio to weather a range of market and economic conditions by taking ESG risks into account at every stage of the investment process, and by supporting our investee companies in their transition towards more sustainable business practices and a low-carbon economy. Our mission is to preserve and enhance the international purchasing power of the reserves placed under our management by delivering good long-term returns above global inflation. The compliance programme also requires that all staff adhere to their confidentiality obligations and responsibilities. Our Internal Audit Department (IAD) forms the third line of defence. Our infrastructure group takes a multipronged approach to investing. Portfolio diversificationThis starts with a clear understanding of the real underlying risks of each investment in various scenarios. Issuers carry an initial investment minimum, usually around $500, that must be paid into the GIC when you open your account. We identify and assess drivers of long-term value as a core part of our investment process. Calculate. For example, active strategies designed to outperform public equities are funded from passive public equity holdings in the Policy Portfolio. The Active Portfolio comprises skill-based strategies to add value to the Policy Portfolio, while broadly maintaining the same level of systematic risk. GIC adopts a strong control orientation in managing counterparty credit risk, trading only with financially sound and reputable counterparties. These were stress-tested through regular exercises, and updated to be in line with industry best practice. It is also the forum that assesses and makes determinations on fiduciary risk and reputational risk issues. An assetâs price is driven largely by market sentiment, while its value lies in its fundamental worth. 3. Incorporating sustainability signals into quantitative strategies, for example, by using proprietary data and analyses. A Coordinated, Global Response to Disruptions. Our global programme holds the ISO 22301 certification, the international standard for business continuity management, and maintains this certification through annual external attestations. As mentioned, some investors use GICs either in place of, or in addition to, bonds in the fixed income portion of their overall portfolio. These considerations, which include track record, ability, and integrity of management teams and business practices, are integral to our investment process. Through active asset management, GIC can further generate income and enhance the market value of its assets through tenant management, market positioning, leasing, and capital improvements. Similarly on the operations front, we maintain a robust crisis management and business continuity programme to ensure that we are well-equipped to respond to crisis events and manage the return to business as usual. GIC said that it will integrate the Maximus portfolio, which spans more than 1 million square metres (10.8 million square feet) of industrial space in the continent, into its existing pan-European warehouse platform P3 Logistic Parks. The BCM Steering Committee manages crises with the BCM Working Group and local BCM Incident Management Teams who implement response activities on the ground. Conversely, when equities do poorly, such as after the bursting of an economic bubble, rebalancing calls for us to buy. GIC was an early entrant among institutional investors in real estate. A dedicated team of cyber security and IT risk management professionals maintains our cyber defence capabilities, as well as oversees technology operations and use of IT across the organization. Guaranteed Investment (Interest) Certificate - GIC: A deposit investment security sold by Canadian banks and trust companies . We gain from technological disruptions by investing in the winners of this shift. The GIC Board sets an active risk budget that the GIC Management can use for its alpha strategies. Supporting the Task Force on Climate-related Financial Disclosures (TCFD): We integrate the assessment of climate change-related risks and opportunities into each step of our investment process. Any reputational impact due to our actions is carefully managed. Each active strategy is funded by the sale of a Policy Portfolio asset class or combination of asset classes with a similar overall risk profile. Overview: Long-term Investment Performance, Intermediate Markers of Investment Performance, 3 It reports functionally to the Chairperson of the Audit Committee, and administratively to the CEO. As a disciplined, long-term value investor, we take a systematic, patient, and diversified approach in seeking investment opportunities, differentiating between an assetâs current price and its intrinsic value. Why invest in a GIC. This requires having a good understanding and assessment of the threats and opportunities faced by the incumbent companies in our existing holdings. It accounts for the bulk of the risk and return potential of the GIC Portfolio, and seeks to balance the way different asset classes respond to different economic environments. The investment teams add value to the boards and management of the investee companies by providing advice and access to a global network of business links. We continue to develop a strong leadership bench for GIC, allowing us to build new investment capabilities and extend our investment and operating platforms. The investment and operations teams collaborate with the legal and compliance function to manage legal, regulatory, and compliance risks arising from the groupâs investment activities. This is part of a disciplined, professional approach to long-term value investing. They provide support for deal closing, investment and data operations, investment reporting, management reporting, portfolio accounting, valuation, and financing. Our portfolio managers seek efficiency while minimising transaction costs. Our governance and investment processes ensure that we exercise caution and do not take on undue reputational risk in our pursuit of returns. A GIC ladder basically means you split your GIC funds into multiple GICs with different maturities. The tool serves as the central repository for all BCM resources, enabling clarity and transparency. It deliberates on investment and risk issues before they are submitted to relevant board committees. After a three-year period with an initial investment of $100,000, the total value of the client’s portfolio would be approximately $115,763 without the fee and $112.337 with the fee. Construction of an Active Strategy from the Policy Portfolio The illustrative active strategy âAâ has a similar overall risk profile as the weighted combination of three asset classes â Developed Market Equities, Nominal Bonds and Cash, and Real Estate. The Rate of Return for the Term will be the return on the best performing Reference Portfolio during the Term multiplied by the Participation Rate, except that the Rate of Return for the Term will not be less than zero. New forces, from climate change to geopolitical tensions to technological advances, play an increasingly important role in global economies and markets. Our tax positions and obligations are clearly represented in line with applicable tax laws and regulations. GIC also monitors the performance of a Reference Portfolio which comprises 65% global equities and 35% bonds. To determine where true fundamental value lies, we use both top-down and bottom-up analyses. GIC. invest in the BMO Top Performing Portfolio GIC plus an amount based on the Rate of Return for the Term, if any. The policies and guidelines translate our investment mandate and risk management principles into standards that guide our day-to-day activities. Technology, a second major theme, has also been increasingly important in shaping GICâs strategies. To deliver good long-term returns, we consider all opportunities and risks that could drive investment value in the long run. We assess the value of an asset and keep to the price discipline, even if it may mean going against market sentiments. The Carrying Value of the portfolio was Rs 39,126 crore in FY17 and the market value was Rs 69,163 Crore. Our multi-asset macro and systematic strategies also invest in asset classes such as equities and commodities. ISG collaborates with the other groups to jointly invest in large investment opportunities. We invest in companies directly and through funds. GICs are beneficial because they are low-risk and secure. The ISG team optimises our ability to invest flexibly and collaboratively across asset classes, drives innovative investment themes, and enables cross-asset investment opportunities. A standardised tool that adopts the GIC risk posture is used for data collection, analysis and development of strategies. We are open to investing in all countries outside of Singapore, but do not invest in countries that are subject to United Nations Security Council sanctions. GIC is a global long-term investor that manages Singapore's foreign reserves. Cyber Security, Technology and Information Risk. On occasion, there may be a difference between the risk exposure of GIC and the Reference Portfolio. Your account may also be charged other fees and expenses. The CRO is accountable to the Board of Directors, primarily through the Board Risk Committee, on all risk-related matters. On occasion, there may be a difference between the risk exposure of GIC and the Reference Portfolio. All staff are required to observe the policies and procedures set out in GICâs Compliance Manual (incorporating the Code of Ethics), comply with all applicable laws and regulations, uphold exemplary conduct, and to act with integrity at all times. This involves both top-down and bottom-up analyses. Today, the annual figure is somewhere between $35 and $40 billion. Our Integrated Strategies Group (ISG) focuses on cross-asset (public and private), and less conventional investment opportunities across products and geographies. Today there are serious concerns among government officials and investors about the stability of the financial services industry, including insurance companies. The BCM Steering Committee, chaired by the Chief Operating Officer, oversees the development and review of GICâs overall BCM framework, and reports to GICâs Group Executive Committee. The Reference Portfolio is not a benchmark, but an expression of the overall risk that the Client is prepared for the GIC Portfolio to take.â. People are at the heart of our business. We protect our portfolio value by: Understanding the threats and opportunities driven by the technology shift: One significant benefit from investing in new businesses is a better appreciation of the threats and opportunities faced by incumbent companies. Our core investment groups are Public Equities, Fixed Income, Private Equity, Real Estate, and Infrastructure. The Investment Board provides an independent layer of oversight on GICâs active investment management and process. Distribution of asset classes in the Reference Portfolio which characterises the Clientâs risk preference, GICâs Client is the Government, who owns the funds that GIC manages, and has characterized its risk preference using a portfolio of 65% global equities and 35% global bonds (â65-35â). Our business continuity plan is tested and reviewed regularly to ensure that our procedures and infrastructure can support operations in the event of a business disruption. Staying agile and adaptable: We keep up with evolving business models by maintaining a flexible mindset towards changing assumptions such as industry classification, pace of change, brand value and the like. All investment and operations staff are required to identify, evaluate, manage, and report risks in their own areas of responsibility, and to comply with established risk policies, guidelines, limits, and procedures. This ensures risks taken are in line with the risk tolerance set by the Client. Together, the Policy Portfolio and Active Portfolio form the GIC Portfolio. GICâs investing approach is underpinned by our discipline to distinguish price from value. 32.59 Intrinsic Value based on Median EV / Sales Model : Rs. We are committed to developing our employees to their full potential through many learning programmes. We participate in initiatives such as Focusing Capital on the Long Term Global (FCLTGlobal), the International Forum of Sovereign Wealth Funds (IFSWF), and the Task Force on Climate-related Financial Disclosures (TCFD). Investing in thematic opportunities arising from climate change, for example, renewable energy assets, âgreenâ buildings, and technologies that support the low-carbon transition. Singapore’s sovereign wealth fund GIC and Hong Kong’s logistics developer ESR Cayman on Tuesday said they have formed a $750-million (around Rs 5,500 crore) joint venture (JV) to develop and acquire industrial and logistics assets in the country. To meet evolving standards and business needs, our business continuity plans are reviewed regularly, through external certifications and internal exercises. Answer a few questions to find the GIC that’s right for you. The GIC Portfolio is constructed to be resilient across a broad range of possible market and economic conditions, while generating good returns above global inflation in the long term. GIC Fortune accounts for more than half of the GIC Mutual's assets under management. 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