Highlights of GIC Annual Report 2014/2015

HIGHLIGHTS

Primary Performance Metric

• Primary metric to evaluate investment performance is the

rolling 20-year real rate of return for our total portfolio

comprising thousands of investments globally

• Reflects our mandate to preserve and enhance the

international purchasing power of the reserves placed

under our management over the long term

Assessed by our long-term performance on a total portfolio basis

• Sustained delivery of steady long-term returns on Singapore’s

foreign reserves over 20 years

• A more difficult future investment environment with lower

broad market returns and higher volatility

• GIC will keep to its patient orientation and continue to take

advantage of short-term price volatility in order to generate

good real returns over the long term

Executive Summary

• GIC’s annualised real rate of return was 4.9% per year,

over 20 years ending 31 March 2015.

• This level of returns is not expected to continue, with

current high asset prices likely to result in low returns

over the next 5 to 10 years.

• The results underlie the point that to benefit from long-term

investing, we have to be prepared to tolerate short-term

unrealised losses.

Key Highlights

0

1

2

3

4

5

6

7

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

%

4.9% return above

global inflation per year over

20 years

Sustained steady long-term investment returns on Singapore’s

foreign reserves

*For period ended 31 March 2015

Steady Long-Term Performance

Annualised nominal return (USD)*

Annualised volatility*Time Period

GIC Portfolio

Reference Portfolio

GIC Portfolio

Reference Portfolio

20-year

10-year

5-year 6.5%

6.3%

6.1%

7.2%

6.1%

6.9%

9.0%

10.0%

9.0%

10.3%

11.7%

10.8%

*For period ended 31 March 2015

Steady Long-Term Performance

GIC Portfolio consistently less risky than Reference PortfolioDesigned to be resilient; has better risk characteristics than the Reference Portfolio as it is

diversified across multiple asset classes.

0.00

0.05

0.10

0.15

0.20

-25 -20 -15 -10 -5 0 5 10 15 20 25

Probability Density

Simulated Annualised Returns (%)

Distribution of simulated 5- and 20-year annualised real returns of the Reference Portfolio

5-year Annualised Returns 20-year Annualised Returns

Prospects of Investment Returns

Benefitting from long-term investing approach

REFERENCE PORTFOLIOPassive alternative portfolio; set at 65% global equities; 35% global bonds

Consistent with the Client’s Risk Tolerance

+ =Allocation among 6 core

asset classes

Key driver of returns

over the long term

Approved by

GIC Board

Comprises overlay of alpha

(i.e. active,

skill-based strategies)

Adopted by

GIC management

Overseen by

GIC Investment Board

Represents actual

exposures of

GIC portfolio

Within risk limits set by

the Client

Investment Framework

Investment framework sets out responsibilities across GIC

31 March 2015 (%) 31 March 2014 (%)Asset Mix

Developed Markets Equities

Emerging Markets Equities

Nominal Bonds & Cash

Inflation-linked Bonds

Real Estate

Private Equity

100 100TOTAL

29 29

18

32

5

7

9

19

31

5

7

9

Investing in a mix of growth and defensive assets

*As of 31 March 2015

Portfolio Composition

43%

25%

30%

AMERICAS

EUROPE

ASIA

2%AUSTRALASIA

Broad geographical distribution

*As of 31 March 2015

Portfolio Composition

31 March 2015 (%) 31 March 2014 (%)Geographical Distribution

Americas

Europe

Asia

Australasia

100 100TOTAL

United States

Latin America

Others

Others

Eurozone

United Kingdom

Others

North Asia

Japan

34

3

6

43

7

12

6

25

10

15

5

30

2 2

34

4

4

42

8

14

7

29

10

14

3

27

2 2

Geographical distribution

*As of 31 March 2015

Portfolio Composition

Developed Market equities

Emerging Market Equities

Nominal bonds & cash

Inflation-linked Bonds

Real Estate

Private Equity

20% - 30%

15%-20%

GIC Board approves allocation among our 6 asset classes

Asset Class Highlight

4%-6%

25%-30%

9%-13%

11%-15%

Benefits of Real Estate investing • Enables diversification

• Provides inflation hedging benefits for the GIC Portfolio

• Enables a long-term investor such as GIC to reap an illiquidity premium, given

our ability to ride out short-term volatility and market cycles

Asset Class Highlight: Real Estate

Our approach to Real Estate • We invest across the capital structure of real estate, in

both the public and private markets, allowing us to seek out

the best risk-adjusted returns at any time in the market cycle.

• We believe in developing long-term partnerships with our

global network of established and best-in-class partners,

which gives us an edge in access to opportunities and

execution.

• We invest across all major property sectors, including

office, retail, hospitality, residential, industrial and student

accommodation.

• We invest with ‘boots on the ground’ to keep a closer

watch on changing market conditions.

Asset Class Highlight: Real Estate

San Francisco

Mumbai

Singapore

TokyoSeoul

Shanghai

London

New York

Sao Paulo

One of the largest & more established Real Estate investors globally:

• Started cross-border investing in real estate before most other players; substantial

presence in emerging markets, especially in Asia

• Local teams spread over 9 offices on 4 continents

• Real estate portfolio of direct and indirect investments with more than 350 investments

in over 40 countries

Asset Class Highlight: Real Estate

Queen Victoria Building, Sydney

Iglu Portfolio, AustraliaGLP Tokyo II, TokyoShenyang Vanke City, Shenyang, China

Time Warner Center, NYCBluewater, UK

Shiodome City Center, Tokyo

Westin, Paris

Snapshot: Global Portfolio of Real Estate Assets

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