Table of Contents
Temasek felt pretty confident about FTX just ahead of its collapse. Widely regarded as one of Singapore’s two sovereign wealth funds, Temasek wrote down its US$275 million investment (amounting to 0.09% of its US$403 billion portfolio). The Singapore sovereign fund was the third largest investor in FTX.
In July, Temasek held a Temasek Review 2022 media conference in which it was asked about its crypto outlook following crypto winter having invested heavily in FTX.
An unknown reporter asked: “I noticed you’ve made quite a few investments in the crypto industry over the past year, including in the popular exchange FTX. I was hoping you could explain what opportunities you see in this industry and how your outlook for the sector has been impacted by the recent crash in crypto markets?”
In response, Managing Director and Deputy Head of Technology & Consumer at Temasek Martin Fichtner said, “our focus is broadly on blockchain-enabled solutions, platforms, infrastructure and some of the applications, and exchange is an example of that. So FTX is an example of that.”
“In terms of the current market environment, this is part of a cycle of innovation that goes on. Again, we take a long term view and a long term investment horizon,” he continued, adding that Temasek is building a “resilient and forward looking portfolio.”
Russell Tham, joint head of Temasek's Enterprise Development group, who is also the firm's head of strategic development, chimed in saying, “As part of our investment engine strategy, this particular engine is called the Development Engine. This engine is designed to identify and build future-centric capabilities.”
Fichtner was then asked about the valuations of crypto firms that Temasek had invested in. “How have you seen valuations of firms that you’ve invested in such as FTX or Amber being impacted during this current downturn?” Fichtner was asked.
He responded, “we’re seeing a cycle from a valuation perspective happening right now and valuations for higher growth companies that have profitability further out, have come down… we feel strongly about the companies in our portfolio performing well over time and we’ll see cycles in terms of multiples go up and down as the cycles occur.”
Four months later, these comments have clearly not aged well. But Temasek was not alone in its FTX confidence. Regarded as one of the strongest global crypto exchanges, its gigantic downfall and consequential contagion are only reflective of its enormous significance and presence.
In a Facebook post, Ho Ching, the spouse of Singapore’s Prime Minister Lee Hsien Loong and the former CEO of Temasek, conceded that Temasek’s losses is an “egg on our face”, but also argued that some of Temasek’s best investments were made by being “contratrian”.