Finance and Economic

When Tony Tan, executive director of Singapore’s biggest sovereign wealth fund, warned in July the world might plunge into its worst recession in 30 years, many shrugged off his remarks as too gloomy.

Three months later, Tan’s prophecy of doom is becoming a reality as the credit crisis ravages U.S. and European banks and takes a growing toll on the global economy.

Tan’s Government of Singapore Investment Corp (GIC) is meanwhile sitting with 7 percent of its estimated $300 billion portfolio in cash and another 26 percent in G7 government bonds.

Tan, a 68-year old former finance minister, professor and banker, and his team are now cautiously sifting through the financial carnage to shop for distressed assets in the United States in an effort to boost long-term returns for Singapore’s central bank.

GIC released its first performance report last month, after increased scrutiny of sovereign funds by Western lawmakers who want them to be more transparent, and revealed a 4 (best payday loan).5 percent real return in Singapore dollar terms over 20 years.

“We should not assume that the worst is over and we continue to be watchful and prudent in our assessment of the economic risks and in our investments,” Tan, also the fund’s deputy chairman, told reporters at the launch of the report.

Song Seng Wun, a Singapore-based economist with Malaysia’s CIMB, said Tan’s long stint with the private and public sector makes him experienced enough to guide GIC through the crisis.

“I don’t think you can compare him to an investor like Warren Buffett,” he said. “But he is an old hand who has seen the ups and downs of the Singapore economy and it is good to have someone like him steering the ship.” 

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