published Sep 5, 2018, 8:23:30 PM, by Klaus Wille and Haslinda Amin
(Bloomberg) —

Technology companies need a “relentless” focus on customer value to flourish, the chief executive officer of Singapore’s sovereign wealth fund said.

“Business enterprises ultimately succeed or fail on whether they deliver customer value,” GIC Pte CEO Lim Chow Kiat said at the Bloomberg Sooner Than You Think technology summit in Singapore on Thursday. “Getting this right is fundamental. ‘Good, cheap and fast’ still matters, perhaps even more so. It’s the great formula for producing unicorns.”

Singapore’s state fund has been an investor in technology since its founding in 1981, Lim said. The investment firm started investing in venture capital funds in 1986, when it opened its office in San Francisco and buys into technology across all stages of a company’s life. Among its larger tech investments are interests in Alibaba Group Holding Ltd. and smartphone maker Xiaomi Corp.

In evaluating investment opportunities, Lim said a point will soon be reached “where every company is a tech company.”

“We have found traditional companies which have very substantial technology capabilities, but some times are trading at what is called ‘old economy’ valuations,” he said. “They are good investments and our teams work very hard trying to find more of them.”

Emerging Markets

Lim also signaled GIC won’t be perturbed by the rout in emerging markets, at least when it comes to technology investments.

“Emerging markets are currently going through a bit of turmoil,” he said. “But technology disruptions can be even more powerful in less developed economies. There are more unmet needs and more undiscovered needs. A well-funded disruptor has many leap-frogging opportunities.”

GIC’s investments in technology, media and telecommunications rose to 20 percent of all equity investments last year from 3 percent in 2009, data from the London-based Sovereign Wealth Center show.

GIC said in July that its annualized real rate of return fell to 3.4 percent in the 20 years to March 31, from 3.7 percent in the prior comparable period. In a sign of its growing caution, the fund has reduced the proportion of its money allocated to developed-economy stocks and boosted holdings of cash and nominal bonds.

-With assistance from Andy Clarke and Richard Lewis.To contact the reporters on this story: Klaus Wille in Singapore at kwille@bloomberg.net ;Haslinda Amin in Singapore at hamin1@bloomberg.net To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net Peter Vercoe
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