Norway fund “management costs” US$0.5b, Temasek “admin. expenses” S$8b

temasek

Why is it that Temasek does not disclose its “management costs” like Norway’s sovereign wealth fund? 

I refer to the article “Norway’s $1 Trillion Oil Fund Taken to Task Over Rising Cost” (Bloomberg, Jan 18, 2018).

It states that “The ministry said that management costs have risen “significantly over time” and are projected to hit 3.5 billion kroner ($446 million) this year, up from 2.1 billion kroner in 2014. The ministry pointed out that based on its 2017-2019 strategy plan the fund is now running ahead of schedule in terms of employees.”

So, does it mean that the “management costs” of Norway’s Sovereign Wealth Fund (SWF) is about 0.05 per cent ($446 million divided by $1 trillion) of its portfolio value?

To the best of my knowledge, I understand that Temasek does not disclose its  “management costs” (such as the CEO’s annual remuneration) like Norway’s SWF.

What we know is that Temasek’s administrative expenses were S$8.4 billion in 2017, on a net portfolio value of S$275 billion.

Of course, Temasek has clarified that its “administrative expenses” – “”This (administrative expenses) also included expenses of subsidiary companies such Singapore Airlines, PSA, and others, and not for Temasek Holdings only”” (“Temasek Holdings responds to NSP’s claims“, Yahoo News, Aug 23, 2011).

Perhaps Temasek can go one step further by disclosing its “management costs” like Norway’s SWF.

Do most SWFs report “management costs” like Norway’s or just “administrative expenses” like Temasek?

Do most SWFs report “administrative expenses” that include the “expenses of subsidiary companies” (which it owns wholly or partly in its portfolio?) like Temasek?

Leong Sze Hian

 

 

About the Author

Leong
Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.