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Bryan Goh emailed Opalesque an article he wrote for the Singapore Strait Times (Source). In the article, he says that Temasek’s track record has come under fire of late for a couple of false steps, notably its investments in Merrill and Barclays. "These false steps are unfortunate, but so too is a general criticism of Temasek", according to Goh.

Temasek should not shy away from taking risk, particularly now. The last 30 years have seen steady growth in economies and wealth. The democratization of risk through the rise of derivatives, the growth of capital employed in active management across markets, in arbitrage and relative value as well as traditional investing, the widening and deepening of markets, have all contributed to a gradual reduction in continuous risk.

Gap risk

Unfortunately this has also stored up gap risk. In the period of calm preceding 2008, however, the risk reward characteristics of investment in general were deteriorating as more capital chased fewer opportunities manifesting in higher correlation between seemingly unrelated investments, the need for more leverage to eke out decreasing levels of return, lower volatility across almost all markets. Risk levels became higher as risk perception became lower. Risk is highest in calm waters. Once the iceberg is sighted and collided with, risk is appar......................

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