Cost Discipline​

We actively manage our costs to deliver value. Our Board sets an overall limit for our annual operating expense and approves our annual budget, which includes our operating expense. As a Fifth Schedule entity, Temasek submits our annual budget to the President of Singapore, together with a declaration of whether it is likely to draw on Temasek’s past reserves. The President may, in consultation with the Council of Presidential Advisers, veto the budget if he is of the opinion that the budget is likely to draw on past reserves.

In addition, we work with independent third-party consultants to develop a composite benchmark cost methodology to benchmark our operating expense. The composite benchmark cost is an estimate of the cost required to manage a portfolio like Temasek’s. It is determined using operating expense data of comparable peers for the various investment strategies we employ. The composite benchmark methodology and cost are reviewed and updated periodically.