Singapore state investor Temasek plans to invest up to $30 billion over the next five years in the U.S. in sectors such as healthcare, financial services and technology.
“It’s an incredibly deep and broad capital market in the U.S.,” Jane Atherton, Temasek’s head of North America, told Reuters. “The U.S. is really at the forefront of everything that’s happening from the AI perspective.”
The U.S. economy grew faster than expected in the second quarter and continues to outperform its global peers. Despite recent turbulence, the S&P 500 is up 14.5% this year in a rally driven in part by excitement over artificial intelligence.
In contrast, China reported weaker-than-expected growth earlier this month and surprised markets by cutting major short- and long-term interest rates last week in a bid to boost its economy.
About 22% of Temasek’s investments are in the Americas, or $63 billion, and 19% in China. Its exposure to the Americas surpassed China in the last financial year for the first time in a decade.
In the U.S., Temasek is particularly interested in areas related to artificial intelligence, such as data centers, semiconductors and battery storage, Atherton said.
Temasek said earlier this month that profits from investments in the U.S. and India were helping cushion underperformance in China. Temasek also said it is taking a cautious approach to China amid trade tensions.
“Geopolitics always plays a role,” Atherton said while noting that China has underperformed the rest of the world and particularly the U.S. over the past three years.
Temasek manages a $288 billion portfolio focused on long-term investments with themes such as digitization and sustainability.
Atherton said most of the future performance of U.S. stocks will rely on earnings, especially for the tech megacap sector.
“You’ve seen some multiple expansion, but that’s been driven by higher growth, and in theory, it’ll pay for it,” she said.
Temasek is also looking for investments in both public and private markets, as more private equity firms seek to divest.
Reuters
