- Temasek Holdings cuts compensation for the team that recommended investing in FTX.
- The investment led to a writedown of $275 million for Singapore’s state fund.
- Despite the setback, Temasek continues to focus on investing in early-stage companies and emerging technologies.
It is no secret that FTX’s founder and former CEO, Sam Bankman-Fried, managed to woo many sophisticated investors. These included managers of Singapore’s state fund Temasek, who will now see some accountability for their mistakes.
On Monday, May 29, Temasek Holdings issued a statement revealing a cut in compensation for the team that recommended investing in the now-bankrupt FTX and its senior management team. This decision was made as a form of “collective accountability” for the failed investment.
The Fallout from the FTX Investment
The announcement comes after Temasek conducted an internal review of its investment in FTX, which resulted in a writedown of $275 million.
FTX, once valued at $32 billion, filed for bankruptcy protection in the United States in November. Other investors, including SoftBank and Sequoia Capital, declared their investment zero following the bankruptcy filing.
Temasek’s Chairman, Lim Boon Heng, expressed disappointment over the investment outcome and its negative impact on Temasek’s reputation.
“Although there was no misconduct by the investment team in reaching their investment recommendation,” Temasek’s statement said,” the investment team and senior management, who are ultimately responsible for investment decisions made, took collective accountability and had their compensation reduced.”
Temasek’s investment cost in FTX was 0.09% of its net portfolio value of $304 billion. Despite this setback, Temasek continues to focus on investing in early-stage companies and emerging technologies.
On the Flipside
- Temasek currently has no direct exposure to crypto assets.
- Last year, Temasek said it conducted “extensive due diligence” on FTX, with its audited financial statement that “showed it to be profitable.”
Why This Matters
Temasek is one of the largest investment funds in emerging tech. Its shift away from crypto assets presents a significant loss for the industry.
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