Does Temasek need to cut jobs after last year's big hiring?
If you live in Singapore, then Temasek, the Singaporean sovereign wealth fund with US$280bn in assets under management, is a pretty good place to work. It doesn't pay badly and for the past few years, it has hired relentlessly. But today's poor set of results may give pause for thought.
In the year ending March 2023, Temasek made a loss of SG$7bn ($5.2bn) and generated a shareholder return of -5%. Shareholder returns were negative in 2016, too. However, as the chart below, taken from the annual report, shows, this was the fund's first actual loss for a decade.
The loss raises questions about Temasek's enthusiasm for adding staff. Headcount at the fund increased by nearly 9% last year as the fund added 77 people. 63 of them joined in Singapore, where Temasek has 75% of its 957 global staff. Most of them are native Singaporeans, aided by a tiny proportion of Singapore permanent residents and an even smaller proportion of Singapore expats.
Although Temasek hired at a faster rate last year, the 12 months to March '23 were the culmination of years of recruitment. Headcount at the fund is up 30% since 2018 as headcount has been added across areas like digital technology, data science, Artificial Intelligence, blockchain, cybersecurity, and sustainability.
Like most funds, Temasek has a tendency to recruit swathes of junior and mid-ranking investment professionals. Recent hires in New York include: Charlie Potts, formerly an analyst at hedge fund Exoduspoint and Sagar Vaidya, formerly a restructuring associate at Evercore. In Singapore, it's added the likes of Julian Barszczewski from Lazard and Francis Chiang from United Overseas Bank.
Temasek can pay well. Recent H1B visa filings in America show it offering assistant vice president salaries of between $105k and $228k. Wall Street Oasis puts bonuses at an additional 70% of this on average.
Can Temasek afford its expanded staff? Last year would suggest not. The fund attributed the loss to unrealized losses from mark to market accounting, reflecting the decline in equity valuations. Those declines were worse in its technology, life sciences and payments investments.
The good news is that there's little sign that Temasek heads will actually roll. Hiring, however, may slow a lot. And bonuses at the fund could well disappear.
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