Like all large investors, Temasek will find it increasingly difficult to get that extra bit of yield on its investments. For one thing, the bigger the institution, the more difficult it will be to generate high returns, noted SMU Professor of Finance Melvyn Teo. "The challenge is for Temasek to maintain its stellar performance going forward. Research on hedge funds and private equity has shown that larger funds tend to underperform smaller funds," he said. "Large funds like Temasek typically cannot be as nimble as smaller funds and face a smaller investment opportunity set."