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Mint
4 days ago
- Business
- Mint
GIC Lifts Americas Investments on AI Boom; APAC Holdings Fall
(Bloomberg) -- Singapore's GIC Pte ramped up investments in the Americas while its Asia-Pacific holdings declined, as the sovereign wealth fund wagers that the US will benefit most from the artificial intelligence boom. North and South America accounted for 49% of GIC's assets as of March, up from 44% a year earlier. Asia-Pacific assets fell to 24% from 28%, according to the fund's annual report released Friday. Europe, the Middle East and Africa were unchanged at 20%. The shift comes as GIC expects a slowdown in the second half of the year alongside rising inflation and uncertainty driven by domestic and geopolitical pressures. The fund's annualized five-year return rose to 6.1% in nominal US dollar terms, up from 4.4% a year earlier. GIC doesn't publish yearly performance figures. 'The forces of change have clearly intensified and will be much harder to prepare for,' said Chief Executive Officer Lim Chow Kiat. He added in a letter accompanying the report that '2025 may be a turning point in markets — and in history.' GIC, which consulting firm Global SWF estimates has assets under management of $847 billion, is aiming to ramp up deals in artificial intelligence. Lim cited the technology — and AI's effect on US companies in particular — as a reason why some of its geographic holdings may change. The firm's AI investments in the US include Atlan, and Ramp, a financial operations firm in New York. 'The US is a huge market, continues to be very innovative, and trends like AI benefits the US the most,' because there are many American companies that can leverage the technology, Lim said in an interview. 'To the extent that the US is allowing us to deploy more capital, the percentages in other regions will become smaller.' Despite the shift away from Asia-Pacific, GIC still sees opportunities there. Group Chief Investment Officer Bryan Yeo said the fund expanded its investment team in Japan over the past year and continues to evaluate deals in India and China. GIC has also anchored several recent initial public offerings in Hong Kong as a cornerstone investor. 'Our base case is really lower growth and, on the margins, higher inflation,' Yeo added. 'We have to get over the higher valuations that we see in India — so it's always figuring out 'is the opportunity in India priced relative to its growth prospects?'' GIC reduced the level of detail it publishes about its investments. For the first time since it began issuing annual reports in 2008, the state-owned investor didn't provide the percentage of its total holdings in any specific country. Nor did it offer specifics on how much of its portfolio sits in developed vs emerging markets equities, private equity or real estate — which it provided in previous years. Instead, all holdings were categorized by what it labels as equities, fixed income or real assets. GIC said these represent exposure to growth, income and inflation, respectively. That means an asset like gold can sit in a variety of categories depending on how it's used. Inflation-linked bonds — which made up 7% of GIC's portfolio last year — sit within the real assets category alongside property, and not in fixed income. By these new measures, 'equities' rose to 51% of assets from 46% a year earlier, while 'fixed income' fell to 26% from 32% over the same period. 'Real assets' were largely flat at 23%. Within equities, the fund increased investments in the US, which remains its largest market by capital deployment. The reduced disclosure from the firm, which doesn't reveal the value of its assets, comes as countries around the world increase scrutiny of foreign investors amid rising populism and national security concerns. 'It's most important to present information in a way that allows you to have a good idea of what GIC's portfolio is like,' said Lim. 'We believe that we are providing sufficient information for the understanding of our stakeholders.' More stories like this are available on
Bloomberg
4 days ago
- Business
- Bloomberg
Sovereign Fund GIC Uses AI ‘Devil's Advocate' for Dealmaking
The next time a banker pitches an investment to GIC Pte, one of the world's biggest sovereign wealth funds, their deal might get picked apart by its latest AI tools: a Virtual Investment Committee and an 'Agentic Devil's Advocate' chatbot designed to ask tough questions. GIC on Thursday unveiled a video demonstration of its newest platform to highlight how AI is changing the way the Singapore state investor does deals. About an hour after uploading data and background materials on a proposed investment, the bot spits out a detailed summary of the key issues and examples of questions an investment committee member might ask before giving it a green light.
Mint
4 days ago
- Business
- Mint
Sovereign Fund GIC Uses AI ‘Devil's Advocate' for Dealmaking
(Bloomberg) -- The next time a banker pitches an investment to GIC Pte, one of the world's biggest sovereign wealth funds, their deal might get picked apart by its latest AI tools: a Virtual Investment Committee and an 'Agentic Devil's Advocate' chatbot designed to ask tough questions. GIC on Thursday unveiled a video demonstration of its newest platform to highlight how AI is changing the way the Singapore state investor does deals. About an hour after uploading data and background materials on a proposed investment, the bot spits out a detailed summary of the key issues and examples of questions an investment committee member might ask before giving it a green light. To truly prepare for pitching to human bosses, GIC staff can also switch to hard mode and 'Spar with an Agentic Devil's Advocate' - a live chat service named 'Ask Charlie' that will simulate conversations and ask curveball questions just as a real committee member might. To build the in-house AI platform, which is meant for internal-use, GIC customized several large language models and input reams of its own data gleaned from four decades of dealmaking around the world. 'We've been around since 1981, so we've got 44 years of data,' said GIC Group Chief Investment Officer Bryan Yeo. 'The data that we have across different asset classes, across different regions through our investments and through our deals actually is the competitive edge we have.' GIC is part of a growing cohort of investment firms racing to use AI to transform their operations and enhance returns. Companies including General Atlantic and Blackstone Inc. have touted their developments, while trying to back startups that could one day outshine Alphabet Inc. and Meta Platforms Inc. And while GIC's AI demonstration could be brushed off as never-to-be-used vaporware if shown by a Silicon Valley startup, few can match the heft and access of the fund - an investment giant estimated by consulting firm Global SWF to manage $847 billion in assets. Read: Singapore's Cautious Wealth Fund Takes More Private Markets Risk Even the fake deal used in the demo, codenamed 'Project Blue Sky,' was a quiet flex of GIC's size. In a $50 billion privatization for an unnamed aeronautical company, $30 billion would come from GIC and its co-investors plus $20 billion in loans, with a planned exit within seven years. That's not a stretch for a fund that was part of a rejigged €6.7 billion ($7.8 billion) deal last week, and helped close a $14 billion take-private transaction for Store Capital Corp. in 2023. The firm's internal teams are using the large language models - Yeo declined to say which - to develop agentic personas to populate the virtual investment committee. Three examples included a risk manager, a contrarian investor and an optimistic investor. Agentic AI systems can operate independently, with less human supervision than generative AI. Deal teams are already using the service, which is currently restricted to asking questions rather than passing final judgment on any deal. But chatbots serving up tough questions have already proven popular with GIC's top leaders. Chief Executive Officer Lim Chow Kiat said the most interesting interactions he's had with the AI agents come from asking them to pose questions that stimulate his thinking. He also repeats the same questions multiple times to see how the responses vary, to better understand their reasoning process. 'We have a separate kind of research tool, which we call Research Assistant, and I use it as a colleague that you can have a back and forth with,' he said. In addition, GIC has been buying stakes in external AI companies, especially in the US. 'Trends like AI benefit the US the most,' because they have so many companies that are able to leverage it, said Lim. GIC is investing in three types of AI firms: enablers that build infrastructure for the sector; monetizers that create and sell AI-infused products and services, often in the form of startups; and adopters which are using AI to improve efficiency in their core business. More stories like this are available on
