Fixed Income Hall of Fame

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Thank you Jack for your very generous introduction. I see your sense of humour is as sharp as ever. I have worked with you for almost 20 years, debating over a great number of investment ideas and learning so much from you. Thank you for being a long term supporter and teacher.

I would first like to congratulate my fellow inductees Bob Auwaerter and Glenn Reynolds. It's a tremendous honour to be in such great company.

I would like to thank the Fixed Income Analyst Society, in particular President Mark Howard and the Hall of Fame Committee, for the nomination and for giving me the award. This is a huge honour for me and GIC. Your effort to advance fixed income research and portfolio management, and in continuing education, is very much admired. And, just as important, thank you for arranging such a lovely dinner.

I would also like to thank my long time business partners and GIC colleagues, for being here tonight. Some of you have flown here all the way from Singapore. Your presence adds meaning and makes the event so much more memorable for me. In particular, it is great to have here my mentor Eugene Boehringer and former teammate Peter Mullahey. Gene, and the larger GIC fixed income team, supported me in every way over many years, did great work, and the credit should really go to the team. Thank you. I should also thank my wife Alice and my three daughters, who are cheering for me in Singapore.

Now I would like to talk about the work of GIC, in particular our commitment to professional advancement, which is what this induction really recognizes. I hope to give you a good idea of who we are, our tenets and how we are preparing for the future. I am also doing this for branding purpose given the esteemed audience here.

Let me begin with a quote from the late Dr. Goh Keng Swee, a founding father of modern Singapore and GIC. He said, and I quote : "There is no real secret about the way in which nations and individuals grow rich. They must save a good part of their incomes and invest their savings profitably. The more you save and the more wisely you invest, the faster you get rich." Unquote.

It sums up GIC's work nicely – to invest wisely, to create wealth by professionally managing the national savings.

GIC, or Government of Singapore Investment Corporation, was set up in 1981. Yes, when Treasury bonds were yielding 14%. We wanted, in fixed income language, to extend the duration of our then small pool of T-bill investments. We did this by investing in bonds, equities, real estate and other long term assets. It was good to extend duration at 14% bond yields. We also wanted to build an organization that was singularly focused on long term investing. Since then, we have grown from managing less than 1 billion to well over 100, from 1 asset class to 13, from 1 office to 9, and from having 20 people to over 1200. We have now a buffer for economic vagaries, a confidence anchor for our financial system, and a steady stream of revenue for the Singapore government to fund its annual budget. In this time of widespread systemic concerns and fiscal difficulties, we are particularly reminded of and grateful for that decision 31 years ago.

We celebrated our 30th anniversary last year, and reflected on the past and future. The future looks daunting and exciting at the same time. We are entering the next 30 years with very low global bond and dividend yields, hinting at prospects of low investment returns. At the same time, the great rise of new economies like China and India are giving us many new opportunities. Technology continues to promise great changes. Faced with these, GIC would need to maintain the certainty of purpose, stick to our long term orientation, and with the help of our business partners, prepare early for the future. We have a saying, tomorrow is determined today. In particular, we will need to remain committed to professional advancement. In that regard, this Hall of Fame induction is a great encouragement to us. In pursing professional excellence, our training in fixed income investing will prove useful for GIC. It will be useful not just in the area of bond investing, but also in other areas, as it has proven for me personally as I took on new responsibilities. The systematic approach, the quantitative rigor, the attention to wider macro developments, and the constant innovation to find better solutions, are good training for any investment challenge. Invest wisely, as Dr. Goh said, is half of the secret to getting rich.

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