Bloomberg says Temasek Holdings Pte is planning a US$3 billion ($4.2 billion) hedge fund, AsianInvestor reported on its website, without saying where it got the information.

The hedge fund may be called Seatown, the English translation of Temasek, the report said. Temasek didn’t respond to a request for comment, AsianInvestor reported. Media officials didn’t answer calls placed by Bloomberg to Temasek’s Singapore office outside of normal business hours.

Temasek, which managed $172 billion as of July 31, may be seeking to boost its returns as hedge funds had their best annual performance in six years in 2009. Temasek has posted average annual returns of 16% since its inception in 1974, according to its annual report released in September, down from the 18% annualised returns it reported in August 2008.

Temasek also has a fund-management unit, Fullerton Fund Management Co., which invests in hedge funds.

Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on their falling as well as rising values and participate substantially in profits from money invested.