THE Government of Singapore Investment Corporation (GIC) takes it 'very seriously' every time there is a decline in the value of its portfolio or an individual investment, Mrs Lim Hwee Hua said yesterday.

But it is 'not realistic' to avoid losses on every investment as that would require GIC to be completely risk-averse, added Mrs Lim, who is Minister in the Prime Minister's Office and Second Minister for Finance and Transport.

Responding to Madam Ho Geok Choo's (West Coast GRC) request in Parliament for an update on GIC's investments, Mrs Lim said that while the state investment agency has made losses on some investments, it has made gains on others.

GIC's portfolio slumped 20 per cent in the financial year ended March last year, but it said in September that it had recovered more than half of those losses.

Since then, some GIC losses have hit the headlines: its investment in Stuyvesant Town and Peter Cooper Village, an apartment complex in Manhattan that was foreclosed on, and a paper loss from its investment in Swiss banking giant UBS.

But Mrs Lim reiterated yesterday that the Government will not judge GIC's performance by individual deals but rather on how well its overall portfolio has done across market cycles.

She said both GIC and Temasek Holdings have so far delivered 'creditable' returns on their portfolios over the long term as well as during the six-year cycle between March 2003 and March last year - that is, from the trough of the dot.com bust to the trough of the credit crisis.

Yesterday, Mr Inderjit Singh (Ang Mo Kio GRC) suggested that it might be 'timely' for GIC and Temasek to adopt a more conservative mandate in view of the losses they have made recently.

Replying, Mrs Lim said that doing this as a knee-jerk reaction to the recent downturn would not be prudent as it could compromise the ability of GIC and Temasek to deliver long-term sustainable returns.

But she added that the investment strategies and approaches of the two investment agencies will 'evolve and adapt to structural changes in the investment environment'.

FIONA CHAN