Overview
Singaporean sovereign investor Temasek is expanding its allocation to Europe, the Middle East and Africa (EMEA) and is now taking a closer look at the defence sector as governments in Europe materially lift military spending in response to the conflict in Ukraine. The region currently represents just 12% of Temasek’s S$518 billion portfolio.
Recent deployment and targets
Temasek’s president of global investments and head of Europe, Middle East and Africa, Nagi Hamiyeh, told Reuters that the fund has deployed roughly c13 billion into EMEA over the past two years. In 2024 the fund set an ambition to invest up to about c17 billion in the region by 2029.
Defence: a new area of interest
Hamiyeh said defence is now among the areas receiving more serious consideration. Until recently, Temasek’s exposure to defence was limited mainly to ST Engineering, a Singaporean company that primarily serves the Singapore Armed Forces. "Besides that, we never really looked at defence," he said, adding that considerations of deterrence and sovereignty have prompted Temasek to make an exception.
Rather than targeting standalone defence manufacturers, Temasek intends to concentrate on dual-use technologies that serve both civilian and military customers. The fund will maintain its environmental, social and governance (ESG) framework when assessing opportunities and has "very, very clear guidelines" that exclude investments related to biological and chemical warfare.
Sector priorities and investment style
Alongside defence, Hamiyeh identified energy transition, infrastructure, luxury goods, industrial technology and life sciences as sectors where Europe has a "right to win" and where Temasek will pursue investments. The investor plans to focus on larger European transactions, setting a minimum ticket size of c200 million and favouring deals in the c500 million to c1 billion range. This approach is intended to enable Temasek’s Europe team, comprised of about 30 professionals, to take an active role in portfolio companies after investment.
Portfolio footprint and examples
Temasek states that roughly 73% of its underlying exposure is outside Singapore; within that international exposure, 26% is in the Americas and 17% in China. About half of the portfolio is held in unlisted assets. In Europe the fund has already invested across sectors including fintech, healthcare and energy, with holdings that include Dutch payments company Adyen and French artificial intelligence startup Mistral AI.
Operational constraints
The fund noted its continued adherence to ESG boundaries and said it will prioritise investment opportunities that meet its responsible-management criteria while avoiding certain defence-related areas. Currency notation in the report used a conversion of $1 = c0.8763.
This article summarises Temasek's stated strategy and regional investment targets as described by the firm's executive, presenting the fund's stated sector priorities, risk controls and deal parameters without extrapolation beyond those comments.