(Nov 20): Temasek Holdings will continue to increase its allocation of funds to the US despite escalating trade tensions, the Singapore state investor’s head of Americas John Vaske said.
Speaking ahead of the Asia-Pacific Agri-Food Innovation Week summit starting in Singapore Wednesday, Vaske said a substantial portion of Temasek’s available funds had been allocated to US deals. While the trade war with China was adding to uncertainties across the economy, he said the long-term thematics of Temasek’s investments remain sound.
“In the last three or four years, if we freed up a dollar for re-investment, 40 US cents of it, plus or minus, is going into the US,” Vaske, who is also head of agribusiness at the $313 billion firm, said in an interview.
“If the US and China de-link, we still have to grow the Americas,” he said. “If they operate together collaboratively, we still have to grow the Americas.”
About 15% of Temasek’s portfolio is invested in North America, and around 7% in life sciences and agribusiness.
Some of Temasek’s biggest successes and challenges in recent years have come in agriculture and the burgeoning area of alternative foods. Its early investment in Impossible Foods has helped keep the plant-based burger company in the race against listed rival Beyond Meat Inc.
But its deal to buy a 3 billion euro ($4.5 billion) stake in Bayer AG has lost value amid a flurry of lawsuits relating to claims a weedkiller brand it acquired when it took over Monsanto Co causes cancer.
Still, Vaske said Temasek was a long-term investor and remained optimistic the underlying reasons for buying the stake will bear fruit.
“The investment may take a little longer to play out, and it’s certainly had some pressure in terms of people who have a different time-frame than we do, in terms of short-term investors who can’t withstand any sort of downward pressure that this litigation may be causing in the share price,” Vaske said. “But again, the fundamental thesis by which we made the investment still holds true.”
Temasek is Bayer’s second-largest shareholder at 3.65% after BlackRock Inc, data compiled by Bloomberg show.
Future agriculture investments will be skewed toward early-stage investments, increasing stakes in existing portfolio companies and private equity, rather than publicly-listed stocks or single, large transactions until Bayer “plays out,” Vaske said.
“The public markets are way too fickle on some of these things,” he said. “It’s just an uncomfortable place to be.”