*

Temasek establishing three new wholly owned units

*

New structure to take effect from April 1, 2026

*

Returns above 7% cost of capital would be 'good outcome',

CEO

says

(Updates with more quotes from CEO, context and background

throughout)

By Yantoultra Ngui

SINGAPORE, Aug 28 (Reuters) - Singapore's state-owned

investor Temasek unveiled its biggest overhaul plan in more than

a decade on Thursday by creating three new entities to better

manage its global investments amid growing geopolitical and

market uncertainties.

The 51-year-old firm, which managed a record S$434

billion ($338.35 billion) portfolio as of March 2025, will

launch the new investment structure from April 1, 2026, CEO

Dilhan Pillay told Reuters.

The new structure, which marks the biggest reorganisation of

the state-owned behemoth since 2011, is aimed at making it

easier for the company to respond to investment challenges and

opportunities more nimbly, he said.

The reorganisation comes against the backdrop of heightened

geopolitical tensions, a shifting regulatory landscape and

developments in digital technologies - factors that are creating

challenges as well as opportunities for global money managers.

The three new Temasek units that are being created as part

of the reorganisation are Temasek Global Investments, Temasek

Singapore, and Temasek Partnership Solutions, said the state

investor.

While Temasek Global will focus on global investments

aligned with structural trends including digitisation, Temasek

Singapore will manage strategic domestic holdings such as

Singapore Airlines and PSA International.

Temasek Partnership will be tasked with overseeing funds and

asset management companies. Temasek International, the existing

entity, will continue to house its group and corporate

functions, the company said.

"The playbook is changing," Pillay said, referring to

macroeconomic and geopolitical shifts globally. "You have to be

very long-term oriented. But you can't be long-term unless you

build muscles in the short term."

In July, Temasek reported an 11.6% year-on-year jump in its

net portfolio value to a record S$434 billion.

Temasek's 10-year total shareholder return of 5% lags the

MSCI ACWI's 9% and Singapore's Straits Times Index at 6%,

though its 20-year return of 7% is broadly in line with both

benchmarks indices.

"If we can still get good returns to our shareholder above

our cost of capital, which is about 7% now, I think that would

be a good outcome," said Pillay, who became CEO in 2021.

LEADERSHIP CHANGES

Temasek is also preparing for a leadership change at board

level. Former Singapore Deputy Prime Minister Teo Chee Hean will

succeed Lim Boon Heng as chair on October 9, after joining as

deputy chair in July.

Temasek also announced the appointment of Chia Song Hwee,

current deputy CEO, as co-CEO of Temasek International from Oct.

1, 2025. Effective April 1, Chia will be CEO of Temasek Global

Investments and deputy chair of the three new units.

Other appointments include Nagi Hamiyeh, head of Europe,

Middle East and Africa, to be concurrently appointed as Temasek

Global Investments' president, and Png Chin Yee, CFO,

concurrently appointed as Temasek Singapore's president.

"The most important thing is to work as a team and empower

people to make agile decisions," said Pillay, who will be

appointed chair of the three new units and Temasek

International.

Pillay will also be chair of Seviora Holdings, a wholly

owned subsidiary of Temasek, effective from Sept. 1, 2025.