Case Studies
SEPARATION AND CONSOLIDATION
Consolidating and separating the management of ownership rights from the policy function
The establishment of a separate and consolidated management of the state’s ownership right’s involves a separation of exercising the ownership rights from other functions performed by the State.
Such centralisation is an important step in developing the capabilities of hiring and maintaining specialists’ skills necessary to be a professional owner of commercial assets. The integrity and professionalism of this centralised ownership unit depends on the strength of the established governance structure. The closer this governance structure resembles a commercial holding company, as could be found for any private sector competitor, the more likely it is that the external stakeholder will trust its independence and autonomy from political interference.
Below are a few examples of centralised ownership platforms with varying degrees of developed governance structures:
- Singapore
- China
- Finland
Temasek Holdings, incorporated in 1974, is the government holding company managing the government’s USD 150bn portfolio of assets in financial services, telecommunications & media, technology, transportation, industrials, life sciences, consumer, real estate, energy & resources.
It owns stakes in many foreign companies, including Standard Chartered, Bank of China, China Construction Bank, ICICI Bank, Global Crossing, as well as local companies, such as SingTel, DBS Bank, Singapore Airlines, PSA International, SMRT Corporation, Singapore Power, Neptune Orient Lines and Mediacorp.
Temasek has the highest credit rating from both S&P and Moody’s.
Government Investment Corporation (GIC), is the government’s USD 330 bn financial investments arm, investing primarily the country's foreign reserves.
State-owned Assets Supervision and Administration Commission (SASAC) is a special ministry established in 2003, responsible for managing the central governments commercial assets, as well as drafting laws related to state-owned enterprises.
SASAC is one of the world’s largest owners of industrial assets, managing a diverse portfolio of assets in oil & energy, minerals & metals, electricity, nuclear, aviation, telecom and defence etc. including some of the largest companies in the world such as Sinopec, China National Petroleum Company and State Grid.
Central Huijin Investment Ltd. (Central Huijin) is a state-owned investment company established in 2003, responsible for managing major state-owned financial enterprises. In 2007 China Investment Corporation (CIC), the state financial investment arm, received Huijin as part of its initial capital contribution.
Central Huijin owns shares in the main commercial banks including China Development Bank, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, China Everbright Bank, and China Reinsurance (Group) Corporation etc.
Central Huijin Company web site 
China Investment Corporation (CIC) 
Solidium, is a wholly owned investment vehicle managing the governments €9bn portfolio of listed companies. The portfolio consists of eleven shareholdings including the IT, telecom, pulp & paper and financial sectors.
It was established in 2009 with the aim to strengthen and stabilise Finnish ownership in nationally important companies and increase the long-term value of its holdings. It claims to be an independent market oriented operator – not a political actor making investment decisions based on financial, as well as national criteria.
The Prime Minister’s Office through the State Ownership Steering Department is responsible for the management of an additional 29 companies, of which three: Neste Oil, Fortum and Finnair are listed companies with a total market value of around €10bn, while the remaining 26 assets has an approximate value of around 3bn.
