SINGAPORE (Reuters) - Ho Ching, wife of Singapore Prime Minister Lee Hsien Loong, will step down as chief executive of Temasek, ending a 5-year term which saw the state investment agency expand aggressively beyond Singapore.
It was also involved in controversies around the region.
Ho, 55, joined Temasek as a director in January 2002 and became CEO two years later. She will be replaced by Chip Goodyear, former chief of global miner BHP Billiton, in October.
One of Ho's colleagues once said it was her willingness to take risks, not her family ties, that won her the top job at Temasek, with a mandate to shake up Singapore's state investor, which had assets under management of S$185 billion ($123 billion) at end-March 2008.
That penchant for risk-taking came to the fore in 2007 with Temasek's surprise 2.1 billion pound ($3.1 billion) investment in British bank Barclays Plc (BARC.L: Quote, Profile, Research), which was locked in a costly bidding war for Dutch rival ABN AMRO in what would be the world's biggest bank takeover.
Barclays' share price has sunk to a little over 1 pound from more than 7 pounds when Temasek bought its shares 18 months ago.
The investment was one of many big deals engineered by Ho, who keeps a low profile despite her prominence in financial circles and as a member by marriage of Singapore's first family.
Since taking the helm at Temasek, Ho has stepped up the fund's diversification beyond its small home market. Her goal: a portfolio split with about a third invested in Singapore, a third elsewhere in Asia, and the rest in developed economies.
But while Temasek is regarded as the Asian standard-bearer among increasingly prominent sovereign funds, its large size and government links have provoked opposition to its investments in nearby Thailand and Indonesia.
In 2006, a Temasek-led $3.8 billion investment in Thai telecoms firm Shin Corp SHIN.BK, then owned by the family of former Thai Prime Minister Thaksin Shinawatra, triggered a prolonged political crisis in Bangkok that led to Thaksin's ouster in a bloodless coup.
Shin has since lost about two-thirds of its market value.
Temasek's investment in Indonesia's PT Indosat (ISAT.JK: Quote, Profile, Research) has also come under attack, in part because Temasek-linked companies are big investors in the country's telecoms sector. Temasek says it is not involved in any anti-competitive business practices.
Temasek is nursing losses from high profile investments in Merrill Lynch and Barclays as it looked to expand outside Asia, but came up against a global financial crisis.
"These are turbulent times and I'm sure she must have had a stressful time this year," said David Cohen, economist at Action Economics.
Temasek's $5 billion plus investment in Merrill alone has resulted in a loss of more than $2 billion.
Temasek Chairman S. Dhanabalan said Ho's decision to step down was not linked to performance, and it was too early to determine if investments made in the last two years would lose out in the long-term.
Ho tends to avoid the media and has made few comments on Shin. When she addressed a Morgan Stanley conference in November 2006, with the Shin deal in the limelight, the bank told the media not to ask questions.
Ho began her career at Singapore's Ministry of Defense, where she met her husband, the eldest son of former Prime Minister Lee Kuan Yew.
While Lee took up a variety of cabinet positions, Ho moved to state-owned Singapore Technologies in 1987, running a mix of defense, technology, property and stockbroking firms which she restructured, divesting some units and listing others.
When Dhanabalan, a former cabinet minister, asked Ho to head Temasek, he told local media she was "the best person for the job," and the appointment had "nothing to do" with her being Lee's wife.
Asked on Friday if she had any regrets as her departure was announced, Ho replied: "No. I think if you want to run life with regret, you will end up doing very little."