Singapore’s sovereign investor sees opportunity in uncertainty
Singapore’s state-owned investment firm Temasek is ramping up its focus on Europe, citing favorable valuations and long-term strategic openings triggered by trade tensions. Following the economic ripple effects of U.S. President Donald Trump’s “Liberation Day” tariff campaign in April, Temasek sees Europe as a fertile ground for new capital deployment.
“Sometimes the macro helps us go into companies that we have liked, that were not within our reach from a valuation perspective,” said Nagi Hamiyeh, Temasek’s head of Europe, the Middle East, and Africa, in an interview with Reuters. “There is still a big gap in terms of valuation arbitrage between Europe and the U.S., so that makes us even more confident.”
Temasek invested over S$10 billion ($7.8 billion) in Europe in the financial year ending March 2025. This figure accounts for around 40% of the S$25 billion it earmarked last year for the region over a five-year period. The firm’s portfolio reached a record S$434 billion, up 11.6% year-over-year.
Target sectors: Energy, finance, consumer goods
Among Temasek’s recent European bets are French renewable energy firm Neoen and Irish gaming services company Keywords Studios. Moving forward, the investor plans to deepen exposure to family-owned and global European firms across industrials, renewable energy, financial services, and consumer goods.
Temasek’s interest lies not only in valuation arbitrage but also in the underlying strength and global reach of these businesses. “We are looking at businesses that can scale internationally or already have a global footprint,” said Hamiyeh.
Markets of particular interest include France, Germany, Italy, and Scandinavia — countries with mature economies, strong industrial bases, and resilient brands. The firm is also keen on companies with generational ownership that may be seeking a strategic partner or capital for expansion.
Trade tensions fuel capital shift
The geopolitical backdrop is reshaping global investment flows. Trump’s tariff shocks have led to renewed volatility, prompting some institutional investors to diversify out of U.S. assets. Europe, traditionally seen as slower-growing, is now drawing fresh interest thanks to its comparatively lower valuations and steady fundamentals.
Temasek appears to be capitalizing on this moment. As U.S. and Chinese firms grapple with geopolitical restrictions and valuation premiums, European companies are becoming a more attractive proposition, especially those operating in sectors aligned with global megatrends like sustainability and digitization.
Long-term commitment, selective strategy
Temasek’s measured approach suggests it is in no rush to chase deals. Instead, the firm is positioning itself to take advantage of unique openings created by macroeconomic dislocation and political risk. With a five-year European investment roadmap already underway, the investor is seeking quality assets with clear value creation potential.
Its recent moves also underscore a growing theme among global sovereign wealth funds: increasing exposure to real assets and private markets in developed economies, especially when market dislocations make entry points more attractive.
