NEW YORK (Reuters) – Singapore state investor Temasek plans to invest up to $30 billion over the next five years in the United States in sectors such as health care, financial services and technology.
“It’s an incredibly deep and broad capital market in the US,” Jane Atherton, head of North America at Temasek, told Reuters. “The US is at the forefront of everything that’s happening from an AI perspective.”
The U.S. economy grew faster than expected in the second quarter and continues to outpace its global peers. Despite recent turmoil, the S&P 500 is up 14.5% this year in a rally fueled in part by excitement over artificial intelligence.
In contrast, China reported weaker-than-expected growth earlier this month and surprised markets by cutting key short- and long-term interest rates last week in an effort to boost its economy.
About 22% of Temasek’s investments are in the Americas, or $63 billion, and 19% in China. Its exposure to the Americas surpassed China in the last financial year for the first time in a decade.
In the US, Temasek is particularly interested in areas related to artificial intelligence, such as data centres, semiconductors and battery storage, Atherton said.
Temasek said earlier this month that gains from investments in the United States and India were helping to offset weak performance in China. Temasek also said it was taking a cautious approach to China amid trade tensions.
“Geopolitics always plays a role,” Atherton said, noting that China has underperformed the rest of the world, especially the United States, over the past three years.
Temasek manages a $288 billion portfolio focused on long-term investments with themes such as digitalization and sustainability.
Much of the future performance of U.S. stocks will depend on earnings, especially for the tech giant, Atherton said.
“We’ve had some multiple expansions, but that’s been driven by higher growth, and in theory it will pay for that,” she said.
Temasek is also looking for investments in both the public and private markets, as more private equity firms seek to divest.
(Reporting by Carolina Mandel, Saeed Azhar and Louis Krauskopf in New York; Editing by Ira Iosebashvili and Leslie Adler)
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