Temasek Holdings Sets Up New Fund

Singapore state investor Temasek Holdings has set up a new subsidiary called Pavilion Capital Pte Ltd that will invest primarily in privately owned firms in North Asia, writes Reuters. The wholly owned subsidiary will be headed by Temasek’s former chief investment officer, Tow Heng Tan. The fund will have at least $1 billion to invest, a source familiar with the plans told Reuters.

(Reuters) – Singapore state investor Temasek Holdings said on Tuesday it has set up a new subsidiary called Pavilion Capital Pte Ltd that will invest primarily in privately owned firms in North Asia.

The wholly owned subsidiary will be headed by Temasek’s former chief investment officer, Tow Heng Tan, a Temasek spokeswoman said in a statement. The fund will have at least $1 billion to invest and Tow will be based in Singapore, a source familiar with the plans told Reuters.

“This new platform will focus on funds and direct investments in North Asia, particularly to expand our current reach and coverage of the opportunities with privately owned enterprises and small and medium enterprises in China,” Temasek said.

Temasek hired former Merrill Lynch Southeast Asia investment banking head Tan Chong Lee as its new chief investment officer late last year.

Temasek had a portfolio worth S$193 billion ($148.85 billion) as of March 31, 2011. The state investor invests primarily in emerging markets.

A number of senior executives in Temasek have moved to funds linked to the state investor or have left in the company in the last few months.

Prominent ones included Charles Ong, a senior managing director, who joined his brother Richard to advise on his $2.3 billion private equity firm RRJ Capital.

Temasek’s India head, Manish Kejriwal, also decided to step down to explore the creation of a new fund in India while head of strategy, Jimmy Phoon, became chief executive officer of Temasek-linked investment firm Seatown Holdings .

($1 = 1.2967 Singapore dollars) (Reporting by Harry Suhartono and Saeed Azhar)