Singaporean sovereign wealth fund GIC Pte reported its lowest five-year annualized return in more than a decade, after the giant investor reduced some of its risks earlier on and its bond holdings didn’t fully rebound.
The firm, which Global SWF estimates has $936 billion under management, said its nominal returns annualized over the five years through March 31 this year dropped to 3.6% from 6.1% a year earlier. It was the worst such result since 2013, and was in large part because the 2021 fiscal year — when global markets staged a strong rally and gave GIC’s portfolio a big boost — was no longer part of the rolling calculation.
GIC, which invests a large portion of Singapore’s reserves, has long said it prefers to focus on long-term returns and in particular, its annualized 20-year return. That was 5.6% for its recently ended fiscal year in nominal terms, and 3.4% after adjusting for inflation.
Still, the fall in five-year returns comes at a challenging time for one of the world’s largest sovereign funds. High inflation, volatile markets, geopolitical uncertainties and other structural changes have made it harder than before to deliver steady returns.
“These are recurring forces. We think they have left the world more constrained and more fragmented,” said GIC Chief Executive Officer Lim Chow Kiat in an interview. “In the early part of the five-year period you had episodes of inflation spikes, which affected financial assets — both bonds and equities. Bonds have not quite recovered from that.” He said GIC also took less risk overall during that period.
The vast majority of GIC’s portfolio is invested outside of Singapore. The US remained its biggest investment market, according to its latest annual report. While the fund no longer discloses how much it invests in the country, 53% of its assets were allocated to the Americas, up from 44% in 2024.
Much of that was driven by the increasing value of public equity and AI investments in the US. GIC is a major investor in Anthropic as well as other industry stalwarts like Databricks Inc., having long based a dedicated technology investment group out of San Francisco.
“In the AI space I would say there have been more opportunities in the US — they have produced large companies that allow us to deploy more capital,” Lim said.
In contrast, GIC’s Asia-Pacific holdings fell from 28% to 22% over the same two-year period. Broadly, the fund classified 56% of its portfolio as “equities” as of March, with the rest about evenly split across “fixed income” and “real assets,” a category that includes property and infrastructure.
GIC intends to deploy an additional $30 billion in the next three years into hedge funds, said Group Chief Investment Officer Bryan Yeo. The fund has tripled its investments in hedge funds over the past 10 years, it said, though it didn’t disclose the current size of that allocation.
Two areas where GIC has become more cautious are private credit and private equity. The flood of investors keen to lend out money has led to a loosening of credit standards broadly, creating more risks.
The fund has countered that by tightening its lending criteria and using its own metrics to evaluate borrowers’ creditworthiness, Yeo said, adding that GIC has raised the bar for underwriting over the last two years and is actively “recycling” capital across its private market strategies.
“We are still active, but I would say selectively,” Lim said. “Private equity is also going through a period of challenges because of high interest rates and questions around AI’s impact — I think as with many of our peers we have to be very selective about new money that we will deploy into this area.”
GIC has ceased a long-time practice of publishing the returns of a reference portfolio that represented the risk its client was willing to take. For years, the firm had regularly underperformed it on returns while delivering better volatility.
The fund’s nominal 10-year annualized returns hit 6.2%, up from 5% a year earlier. And despite its stated goal of becoming “AI Native,” the investment giant’s headcount continues to grow — it went from 2,370 from March last year to 2,525 this year.
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