Temasek Review 2021

Wealth Added

In 2003, we adopted the discipline of measuring our returns against our risk-adjusted cost of capital, to account for the capital deployed and the associated risks taken.

Wealth Added (WA) is our total dollar return above our risk-adjusted cost of capital. Investments in riskier sectors or markets have higher costs of capital.

The use of WA instils the discipline of ensuring that we continue to assess returns against the capital deployed and the financial risks taken. This normalises returns against risks.

Total WA is the sum of all our individual investment WA, adjusted for changes in the net present value of our operating costs.

Our WA for the year was S$62.2 billion.

Illustration of Wealth Added