Update: Temasek confirms hedge fund plans

Singapore government investment fund Temasek Holdings has confirmed the existence of Seatown Holdings, a wholly owned investment subsidiary.

Charles Ong has been appointed its CEO. There is already a core staff seconded from Temasek and Seatown intends to build this from external hires, says a Temasek spokesperson.

Ong is senior managing director at Temasek and its chief strategist. He joined in 2002 and has worked as an investment banker at Lazard Freres in New York and Deutsche Bank in Singapore.

Ong was once Temasek's CIO, but in 2006 was moved to a newly created role as chief strategist. This happened after Temasek was embroiled in a political spat in Thailand: Temasek was investigated for its $1.9 billion stake in Shin Corp, the telecommunications company owned by the family of deposed prime minister Thaksin Shinawatra.

The issue caused a furore in Thailand because the deal was structured so that Thaksin didn't pay any capital-gain taxes on the sale. At the time, Temasek denied a connection and termed Ong's transition a routine rotation.

Confirmation of the Seatown plans follows AsianInvestor breaking the news yesterday of its existence. Rumour has it that Seatown -- the English translation of the word 'Temasek' -- is to be a massive hedge-fund platform. This would also be the first time a sovereign wealth fund will have set up such a structure, rather than outsourcing to third-party hedge funds and funds of funds.

Seatown, which is expected to adopt a multi-strategy approach, will be Temasek's second investment platform. The company also owns Fullerton Investment Management, a long-only fund house that manages both Temasek money and third-party assets.

Believed to be $3 billion in size, the launch alone will pretty much make it the region's largest hedge fund from day one.

Temasek is the smaller of Singapore's two SWFs and has been active in the capital markets this week having sold S$1 billion ($705 million) of 10-year bonds on Monday.

Picture: © AFP