GIC Plans $30 Billion Hedge Fund Push and AI Expansion Despite Weakest Returns Since 2020

Singapore's GIC banks on hedge funds to weather market volatility, rides AI boom

SINGAPORE, July 24 (Reuters) - Singapore sovereign wealth fund GIC plans to deploy an additional $30 billion into hedge funds and is spreading its bets across AI, top executives said, while reporting its weakest long-run returns since 2020. Group Chief Investment Officer Bryan Yeo said the money would be allocated over three years and that the fund's top executives see opportunities in global macro, quantitative and multi-strategy funds, which span multiple assets and can adjust quickly when conditions change. "These are three that we believe the go-forward environment is highly conducive on, and these are also the three types of managers that can actively and dynamically manage their risk and pivot ... as the investment landscape continues to evolve with all the uncertainties," Yeo said, adding that GIC had tripled its hedge fund investments ⁠globally over the past decade. GIC on Friday posted an annualised 20-year real rate of return of 3.4% for the period ended March 31, 2026, down from 3.8% a year earlier. That was its weakest performance since the 2.7% reported in 2020, according to its annual report. GIC does not disclose its assets under management, but the Sovereign Wealth Fund Institute estimates GIC manages about $936 billion in assets. The real return is GIC's main performance measure. It shows how much the fund earned above global inflation over a rolling 20-year period. GIC said the 3.4% return meant it had close to doubled the real value of the reserves under its management over 20 years. Before inflation, the reserves had more than tripled. Its annualised nominal return in U.S. dollar terms was 5.6%. Chief Executive Lim Chow Kiat said the result partly reflected GIC's decision to take on less risk in recent years. "Given our mandate, this result is within that expectation," Lim said. "We wanted to focus on ⁠diversification, and we took less risk." GIC manages part of Singapore's foreign reserves and aims to protect and increase their purchasing power over the long term. ASSESSING THE AI HYPE The AI boom has lifted global equities, but doubts by some investors over returns on heavy capital spending have fuelled sharp swings in technology stocks. While GIC's executives acknowledged the growing risks of crowded bets on AI, they remain bullish on the sector's long-term prospects, diversifying their investments across the AI value chain. "That concentration risk is something that we look at ⁠quite closely," Yeo said. "Very likely, in the entire AI ecosystem, there will be some pockets of hype and overvaluation." GIC said it was investing in AI infrastructure, companies that build AI products and firms that use AI to improve their own operations. But it said the rush into chips, data centres, power and AI models had made it harder to ⁠pick winners over the long run. 'REFRESHED INVESTMENT FRAMEWORK' GIC also said it had started moving to a refreshed investment framework on April 1 to give it more flexibility to shift capital as markets become harder to predict. The new framework groups the portfolio into equities, fixed income and real assets, representing exposure to growth, income ⁠and inflation resilience. Hedge fund allocations are distributed across the groups according to their mandates and strategies. As of March 31, equities made up 56% of GIC's portfolio, up from 51% a year earlier. Fixed income fell to 22% from 26%, while real assets were broadly stable at 22%. The Americas remained its largest exposure at 53%. Reporting by Yantoultra Ngui, Rae Wee and Xinghui Kok in Singapore; Editing by Tom Westbrook and Matthew Lewis Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Asian Markets Yantoultra Ngui Thomson Reuters Yantoultra Ngui is the Southeast Asia Deals Correspondent of Reuters in Singapore, covering M&A and capital market activities in a region that is fast emerging as one of the world's biggest economies. He previously was a reporter at Bloomberg and The Wall Street Journal (WSJ). Notably, he was part of WSJ's team that covered the financial scandal at Malaysian state fund 1MDB, and that won SOPA Excellence in Breaking News award for the coverage of the assassination of Kim Jong Nam, the half-brother of North Korea's leader Kim Jong Un, in Malaysia in 2018. Yantoultra graduated with an MBA in Finance from Universiti Putra Malaysia (UPM) in 2010. Xinghui Kok Thomson Reuters Xinghui leads the Singapore bureau, directing coverage of one of the region's bellwether economies and Southeast Asia's main financial hub. This ranges from macroeconomics to monetary policy, property, politics, public health and socioeconomic issues. She also keeps an eye on things that are unique to Singapore, such as how it repealed an anti-gay sex law but goes against global trends by maintaining policies unfavourable to LGBT families. https://www.reuters.com/world/asia-pacific/even-singapore-lifts-gay-sex-ban-lgbt-families-feel-little-has-changed-2022-11-29/ Xinghui previously covered Asia for the South China Morning Post and has been in journalism for a decade.

Global Market: GIC to invest $30 billion more in hedge funds, doubles down on AI

Singapore's sovereign wealth fund GIC plans significant new investments. The fund will allocate an additional thirty billion dollars to hedge funds over three years. GIC is also expanding its exposure to artificial intelligence opportunities across various sectors. This strategic shift follows a period of more conservative investment and softer long-term returns. The fund aims to improve capital reallocation in an unpredictable global environment. Singapore sovereign wealth fund GIC plans to invest an additional $30 billion in hedge funds over the next three years while expanding its exposure to artificial intelligence opportunities across the investment value chain, according to Reuters. The move comes as the fund reported its weakest 20-year real rate of return since 2020, reflecting a more conservative investment approach adopted in recent years amid heightened global uncertainty. US MarketsPowered By As on 24 Jul 2026, 01:30 AM IST S&P 500 Top Gainers Lockheed Martin568.59(10.54%) Allegion154.57(10.45%) United Rentals1,140(10.11%) Thermo Fisher Scientific572.32(8.71%) Gainers" S&P 500 Top Losers Tesla319.69(-14.52%) T-Mobile US170.42(-10.75%) Molina Healthcare200.29(-9.67%) Rollins39.44(-9.27%) Losers" Hedge fund allocation to focus on agile strategies According to Reuters, GIC's Group Chief Investment Officer Bryan Yeo said the fresh capital will be deployed across global macro, quantitative and multi-strategy hedge funds, which are viewed as well-positioned to navigate volatile markets and rapidly changing economic conditions. The sovereign wealth fund has already tripled its hedge fund investments over the past decade, underscoring its growing preference for flexible investment strategies capable of adjusting portfolios as market conditions evolve. Long-term returns ease GIC reported an annualised 20-year real rate of return of 3.4% for the period ended March 31, 2026, compared with 3.8% a year earlier. Reuters reported that this marks the fund's lowest long-term performance since it recorded 2.7% in 2020. The real rate of return, GIC's primary performance metric, measures investment gains after adjusting for global inflation over a rolling 20-year period. The fund also reported an annualised nominal return of 5.6% in U.S. dollar terms. It said the latest performance has nearly doubled the real value of the reserves under its management over the past two decades, while the reserves have tripled in nominal terms before inflation. Conservative positioning weighed on returns According to a Reuters report, GIC Chief Executive Lim Chow Kiat attributed the softer long-term returns partly to the fund's deliberate decision to reduce portfolio risk in recent years. The strategy focused on greater diversification and lower risk exposure, which management said was consistent with GIC's long-term mandate of preserving and growing Singapore's foreign reserves. Although GIC does not disclose its assets under management, the Sovereign Wealth Fund Institute estimates the fund oversees approximately $936 billion in assets. AI remains a long-term investment theme Despite concerns over elevated valuations across parts of the AI sector, GIC remains optimistic about artificial intelligence as a long-term investment opportunity. According to Reuters, the fund is investing across multiple segments of the AI ecosystem, including infrastructure, companies developing AI technologies, and businesses integrating AI into their operations. However, GIC acknowledged that rapid investment in semiconductors, data centres, power infrastructure and AI models has increased the challenge of identifying long-term winners. The fund said it is closely monitoring concentration risks arising from heavy investor interest in AI-related assets. Portfolio overhaul to improve flexibility GIC also announced that it has adopted a refreshed investment framework from April 1, designed to improve its ability to reallocate capital in an increasingly unpredictable investment environment. Under the new structure, investments are organised into three broad categories, equities, fixed income and real assets, representing growth, income and inflation protection respectively. Hedge fund investments will be allocated across these groups depending on their underlying investment strategies. As of March 31, equities accounted for 56% of GIC's portfolio, up from 51% a year earlier. Fixed income declined to 22% from 26%, while real assets remained unchanged at 22%. The Americas continued to be GIC's largest regional exposure at 53% of the portfolio. AI focus mirrors broader Singapore investment strategy GIC's growing emphasis on AI follows a similar strategy adopted by Singapore state investment firm Temasek, which recently said it plans to increase AI-related investments to 15% of its portfolio by 2031, up from 6% currently, after reporting a record net portfolio value.