Two of Asia’s major wealth funds are undergoing significant changes. While Singapore’s investment corporation is adding heavyweight experience to its executive management, its near neighbour, Malaysia, is curtailing the activity of its country fund.    

As a result of a change in the lineup of senior government officials, part of a strategic succession plan, the Government of Singapore Investment Corporation (GIC) has named Tharman Shanmugaratnam as deputy chairman, effective May 1.

Shanmugaratnam is currently deputy prime minister and co-ordinating minister for economic and social policies, and previously served as minister for finance for eight years from 2007 to 2015.

He is also presently chairman of the Monetary Authority of Singapore, Singapore’s central bank and financial regulator.

Globally recognized expertise

Among other accolades, the highly-respected Shanmugaratnam was appointed chairman of the Group of Thirty, an independent global council of leading economic and financial policymakers, from January 2017.

In April of the same year, he was appointed chairman of the G20 Eminent Persons Group on Global Financial Governance, to review the system of multilateral financial institutions.

In his new role as deputy chairman, he will assist the chairman, Prime Minister Lee Hsien Loong, to lead the board in overseeing GIC’s long-term asset allocation and portfolio performance.

GIC controls the eighth-largest sovereign wealth fund in the world, with about US$390 billion in assets under management (AUM) as of mid-2018.

At the same time, several hundred kilometres to the north of the Lion City, the Kuala Lumpur-based Malaysian wealth fund Khazanah Nasional Berhad confirmed to local media that it had pulled the plug on its London office.

Khazanah is the strategic investment fund of the Malaysian government and is responsible for holding and managing the collective assets of the government and undertaking strategic investments.

Khazanah’s managing director Shahril Ridza Ridzuan verified the news of the termination of the UK unit, which had employed 10 people.

Strategic cost reductions

The wealth fund currently operates offices in the US, China and India, together with its main office in the Malaysian capital. But as the fund continues on a cost-cutting exercise, many analysts suggest it is considering trimming its headcount or shuttering its Turkish unit in Istanbul.    

Following the shock result of the May 2018 election, the Malaysian wealth fund, with an estimated US$33 billion in AUM, made hasty changes to its board of directors, which included the removal of its then chairman, the country's former Prime Minister, Najib Razak.

Allegations aimed at the previous administration included assertions that assets from the Khazanah fund had been siphoned off to pay for liabilities related to the now insolvent strategic development company, 1Malaysia Development Berhad, more commonly known as 1MDB.