Temasek fund loses with FTX, but is not at fault

Singapore’s giant Temasek announces a deadweight loss from 275 million euros due to its participation in the bankruptcy platform FTX. This represents 0.09% of its $403 billion portfolio.

Several days after FTX’s bankruptcy was made official, it is already possible to make a first assessment of the damage, even if the contagion continues, as Gemini and Coinhouse attest.

For the investment fundsThe capital committed in the swap can now be redeemed. This is the case of the Singapore sovereign wealth fund Temasek.

Minority interests in FTX and FTX US.

In a press releasethe latter details its investments. For example, Temasek held a less than 1% in FTX Internationalin the amount of EUR 210 million.

In October 2021 and January 2022, Temasek also participated in two rounds of. FTX US. The fund had approximately 1.5% of the company’s capital. of SBF, for a total of EUR 65 million.

The giant of Singapore Is immune to any contagion. For one, it says it has no direct exposure to cryptocurrencies. And secondly, investment in FTX represented 0.09% of its $403 billion net portfolio value (as of March 31, 2022).

FTX’s fraud exposure and financial fragility (based primarily on its own token FTT) questions the seriousness of investment funds and their financial analysis.

Our investment discipline, focused on intrinsic value and our risk/return framework, guides our due diligence for new investments and our ongoing commitment to the companies in which we invest,” Temasek says, however.

8-month audit of FTX by Temasek.

The latter also claims that it proceeded according to its usual methods with FTX through a 8-month review February to October 2021. “We have reviewed FTX’s audited financial statement, which showed that it was profitable,” the company added.

While these due diligence measures “may mitigate some risks,” they do not “eliminate all risks,” Temasek acknowledged, adding that FTX is suspected of fraud.

It follows from this reversal that our confidence in Sam Bankman-Fried’s actions, judgment, and leadership, formed from our interactions with him and from the opinions expressed in our conversations with others, appears to have been misplaced,” Temasek concludes.

But this industrial failure does not cast doubt on his policy. The fund justifies its strategy, which forces it to invest in activities that present a risk to the environment. a greater risk. These investments constitute 6% on sound portfolio. Overall, they are performing well, notes Temasek.

We continue to recognize the potential of blockchain applications and decentralized technologies to transform sectors and create a more connected world,” concluded the investor.

As for the latest developments, they confirm the “risks already identified.”