The Government Investment Corporation of Singapore is having second thoughts about its investment strategy after losing billions of dollars in the recession, reports the Financial Times.
The Harvard or Yale investment model no longer looks so attractive.
GIC deputy chairman Tony Tan says: "The whole idea of the endowment model has been very influential (before). But any reasonable investor would (now) want to take another look at this."
But, by his own account, the Singapore sovereign wealth fund had done "little intellectual work" to be prepared for the liquidity risk problem caused by the Wall Street meltdown. Liquidity risk arises when an asset or security cannot be sold quickly enough to prevent a loss or make a profit.
The long-term investor was caught flat-footed by the economic crisis. The Financial Times explains: