Malaysian sovereign wealth fund Khazanah Nasional (Khazanah) has announced the completion of its acquisitions of government-backed venture capital agencies – Malaysia Venture Capital Management (MAVCAP) and Penjana Kapital (PK).
Following the deal, both entities will become wholly owned subsidiaries of Khazanah, per an official statement.
In a statement released on Tuesday, Khazanah also revealed plans to set up a National Fund-of-Funds with an initial allocation of RM1 billion ($216.3 million) to invest in innovative and high-growth startups via venture capital and private equity funds.
In line with the Malaysia Budget 2024 announcements, these strategic acquisitions strengthen Malaysia’s VC ecosystem and improve public institutions.
“By consolidating investment platforms across multiple investment agencies, Malaysia will be better positioned to ensure greater sustainability of funding, crowd-in private capital, attract regional VC firms into the country and catalyse strategically important sectors,” said Khazanah Managing Director Dato’ Amirul Feisal Wan Zahir.
MAVCAP has a portfolio of about $1.06 billion, with past investments in 500 Southeast Asia, Gobi Partners, and Singapore-based Lunex Ventures. It was previously under the country’s Ministry of Science, Technology and Innovation (MOSTI). Meanwhile, the first and only fund of Penjana Kapital, which was previously under the Ministry of Finance, was closed in December 2022 at $270 million.
Khazanah stated that the creation of the National Fund-of-Funds is in line with its Future Malaysia Programme designed to bolster the local startup ecosystem by supporting entrepreneurs, startups, venture capital, and corporate venture programmes through partnerships with both domestic and international entities.
The SWF stated that the combined experience and resources of all the entities would enhance access to capital for startups, drive innovation and spur economic growth.
Additionally, as outlined in the Malaysia Venture Capital Roadmap 2024-2030 and the KL20 Action Paper, this initiative plays an important role in Malaysia’s vision to become a preferred regional VC hub by 2030.
Khazanah’s 2023 profit from operations had surged more than threefold to 5.9 billion ringgit (about $1.3 billion) from 1.6 billion ringgit a year earlier, the sovereign fund had stated in a statement earlier.
Its net asset value grew 4.3% to 84.8 billion ringgit in 2023 from 81.3 billion ringgit a year earlier.
