By Yantoultra Ngui, Rae Wee and Xinghui Kok
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 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.
The focus on AI follows a similar push by Singapore state investment company Temasek, which said earlier this month it aimed to raise AI-related exposure to as much as 15% of its portfolio by 2031 from 6% now. Temasek reported a record net portfolio value of S$518 billion.
'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)
