Off with the Heads!
Heads rolling at the operations level? GIC’s loss of $50 billion has resulted in some face-saving staff shuffling, just like how Temasek’s Ho Ching was shown the door a few months ago.
When Citigroup was tottering at the start of this year and probably with the threat of nationalisation if GIC did not play ball with the US government, GIC was forced to convert its preferred shares (bought at $26.35) which pays out interest at 7% per annum, to common stock (priced at $3.25). From what I know, as Citigroup shares then were worth $1 plus but GIC was given a higher $3.25 for each share, this confusing conversion ended up in GIC owning 11% of Citigroup instead of 4%. With the nationalisation of Citigroup nowhere in sight now, GIC looks like it can slump down in relief temporarily. However, the past months since GIC bit into Citigroup and UBS have been risky ones with no real returns in sight. The GIC board has not forgotten and likely think that this is a good time as any to change those at GIC’s operations helm.
Singapore’s GIC names new president, mgt reshuffle
SINGAPORE, June 18 (Reuters) – The Government of Singapore Investment Corp (GIC), which manages an estimated $200 billion-plus in assets, on Thursday named Lim Siong Guan as its group president from July 1.
Lim, a former head of Singapore’s civil service, will also be chairman of GIC Asset Management, the largest of its three operating units and responsible for investments in equities, fixed income, foreign currencies and natural resources. The unit is also responsible for the fund’s absolute returns strategies.
Lim, 62, will take charge of organisational development at GIC Asset Management as well as sister units GIC Real Estate, which handles property, and GIC Special Investments, which takes care of private equity and infrastructure investments.
“The management changes will enable GIC to operate more effectively on an integrated basis,” GIC Deputy Chairman and Executive Director Tony Tan said in a statement.
GIC, which manages Singapore’s foreign currency reserves, has ploughed billions into Citigroup (C.N: Quote, Profile, Research) and UBS and has said it will stick with its investments despite smaller sovereign wealth fund Temasek’s recent move to offload shares in Bank of America and Barclays.
Singapore’s two funds have suffered from the global market turmoil, with GIC’s portfolio falling 25 percent from a peak estimated at $300 billion, while Temasek’s assets declined by 31 percent during March-November last year.
Lee Ek Tieng, 75, another former civil service head, will retire as chairman of GIC Asset Management, while former finance minister Richard Hu, 82, will step down as chairman of GIC Real Estate.
Tan will replace Hu as chairman of GIC Real Estate.