Bold Vision by Freddy Orchard

KEITH YAP -

Summary

This is an immersive history lesson on the birth and evolution of Singapore’s sovereign wealth fund. Orchard’s insider perspective and comprehensive interviews help you peek behind the curtains and re-live the bold decisions made by GIC’s different leaders, leading to its emergence as one of the best-performing sovereign wealth funds today.

This book is a masterclass on studied risk-taking and talent-hunting.

This book is also an ode to Singapore's principal financial architect, Dr Goh Keng Swee

What I Internalized

  1. Dr Goh Keng Swee’s expertise in economics and impressive intellect proved to be as decisive as LKY’s political leadership in establishing Singapore as a financial hub. Singapore had the tremendous luck of having this dynamic duo work on our economic development strategy. We should study more of Dr Goh Keng Swee's contribution to Singapore.
  2. Singapore's smallness and vulnerability have created a unique forcing function that causes GIC to be adaptive and thirsty for new knowledge. Our smallness as a country is not just a limitation, it can create unique competitive advantages for us to thrive.

Main Takeaways

  1. It’s easy to discount past uncertainties in hindsight. We cannot imagine an unstable Singaporean dollar today. In 1967, Singapore issued its new currency in an extremely volatile environment. The British Government was withdrawing its military forces, Singapore lost its hinterland in the separation from Malaysia, and many were still questioning if Singapore was still viable as a nation.
  2. Policy credibility secures system credibility. The discipline you impose on yourself buys you confidence from your clients. Donning the straitjacket of a currency board assured investors that the Singaporean Government was not interested in ‘shortcuts’ to success.
  3. Dig deep for answers. When interviewing the Rothschild consultancy for a project to establish GIC, Lee Kuan Yew asked ‘direct and testing questions’ with ‘sheer incisiveness and ferocious intelligence.’ The interviewee, Moser, exclaimed that even his experience dealing with British PMs did not prepare him for LKY. (Note: This happened after Goh Keng Swee had already recommended them to take the job)
  4. GIC had humble beginnings. It did not start with a grand launch with billions of dollars committed in funding. It started with a prototype - the Department of Overseas Investment (DOI). Even when they became operational, they started off in MAS offices.
  5. GIC is obsessed with talent. Knowing that Singapore still did not have enough experienced professional managers. The leadership was unashamed in seeking exceptional fund managers to head and develop the team in its early years. LKY himself interviewed every senior candidate.
  6. Stay away from bullshit. Before the GFC, GIC avoided investing in structured credit products like CDOs even when they were making sky-high returns and were AAA-rated. Why? These securities were just too opaque. If your bs-meter is going off, trust it.
  7. Learn from Disasters. Even when they were relatively unscathed in the fallout of the crisis, they took 15 months to prepare a new investment framework to strengthen GIC’s robustness in a financial crisis. When you see others fail, don’t laugh at them. Study them and avoid their mistakes.