Temasek's POV: Temasek doesn't just wait for opportunity to come knocking - they actively seek it out.

Temasek approaches investment opportunities with a strong focus on balancing potential returns with associated risks. This disciplined strategy is built around understanding the intrinsic value of businesses and applying a risk-return framework to assess the attractiveness of different investment opportunities.

This framework serves as the foundation for Temasek's investment decisions, and on where to allocate capital, how to measure performance, and how to structure incentives. A key element in this process is the application of a risk-adjusted cost of capital (RACOC) framework that helps determine the appropriate return based on the level of risk involved.

For each investment, Temasek conducts a detailed analysis of its intrinsic value, and the expected returns over various timeframes are evaluated against the investment's respective RACOC. In other words, they access how much return they should expect from an investment, given how risky it is. The difference between the expected return and RACOC - called the spread - shows how attractive the investment is. A larger positive spread suggests that the investment is likely to generate returns that exceed its risk level.

Temasek takes this into account, in addition to analysing the landscape for the business in terms of its competitiveness, product/service offering, strength of management, alignment to structural trends, and so on, when deciding its investment decision.