(Bloomberg) -- The head of Singapore’s sovereign wealth fund is undeterred by the sky-high valuations of tech companies.

“Valuations are high!” Lim Chow Kiat, chief executive officer of GIC Pte, said in an interview at the fund’s San Francisco office on Thursday. “We’re not necessarily scared by that. You just have to make sure you do your homework -- the bar is higher.”

A recent rally has driven the tech-heavy Nasdaq Composite Index to trade at a price-earnings ratio of 34 -- almost twice the valuation of the S&P 500 Index. The Indxx Global Fintech Thematic Index is trading at 58 times earnings.

Still, fintech is one area where Lim and his team see opportunities as startups are fast reinventing payments and other transactions that are transforming the financial services industry.

GIC doesn’t disclose names of startups or companies it invests in. The fund, along with Singapore’s Economic Development Board, held its annual Bridge Forum in San Francisco this week, where they paired traditional companies with fintech startups. Closely held companies featured at the event included Brex, which this week raised $100 million in debt capital via Barclays Investment Bank, as well as cybersecurity startup Darktrace Ltd.

As GIC invests in more startups, the fund, which manages more than $100 billion, still counts traditional banks such as UBS AG among its biggest holdings.

‘Paying Lip Service’

The established financial services firms have reacted in both extremes, with some “paying lip service” to new technology and others working with startups to almost disrupt their businesses, Lim said. Regulators may hasten the transformation.

“Regulators in recent times have embraced the need for radical innovation,” Lim said. “When the regulators come on board, this rate of change will increase. The incumbents have more incentives to change.”

To contact the reporter on this story: Linus Chua in San Francisco at lchua@bloomberg.net

To contact the editors responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net, ;Katrina Nicholas at knicholas2@bloomberg.net, Colin Keatinge, Grant Clark

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