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PETALING JAYA - Ekuiti Nasional Bhd (Ekuinas), a government-linked private equity fund management company formed last September, targets to deliver an internal rate of return (IRR) of at least 12% per annum for its investment portfolio.
It will look at six target sectors – education, oil and gas, fast moving consumer goods, healthcare, retail and leisure and services.
Ekuinas will also help to increase bumiputra equity across four dimensions - enhancing effective equity ownership, expanding the pool of qualified management people, increasing employment and creating value for bumiputra supply chain partners.
Ekuinas chairman Raja Arshad Raja Tun Uda said this at a press conference here on Tuesday to announce the company's Full Disclosure Policy and Investment Framework and Guidelines.
He said the adoption of the policy reflects Ekuinas' commitment to transparency, consistent with its role as a government-funded entity with high public interest.
Allocation of RM50mil
The government has allocated RM500mil to Ekuinas, which would be raised to RM10bil over time, to promote equitable and sustainable bumiputra economic participation via the creation of Malaysia's next generation of leading companies.
Ekuinas expects to make private equity investments directly into companies and other private equity funds of up to RM5bil until 2015 under the 9th and 10th Malaysia Plans.
Raja Arshad (left) and Abdul Rahman, seen here at the launch of Ekuinas in September last year
"We aspire to deliver up to 20%," he said.
"We have studied 132 funds from the emerging markets and 12% is the average target," he added.
"We will invest in companies that are already established with a track record of at least one to three years with significant growth potential," he said, adding that the sectors identified were attractive for the company to invest in.
"We we will maintain flexibility to invest in other sectors according to prevailing market opportunities," he said.
Abdul Rahman said Ekuinas would not invest in gaming, liquor, illegal and unethical, hedge funds, currencies, commodities, properties and contruction industries.
"We are looking for companies with high growth potential. We are focusing on Malaysian companies.
"It can even be an international asset, if there are Malaysian shareholders or if the company has operations in Malaysia," added Abdul Rahman, who previously headed property developer MRCB Berhad and media group Media Prima.
Benchmark against leading wealth funds
In terms of its direct investment criteria, Abdul Rahman said Ekuinas would pursue buy-out transactions with an investment size of at least RM30mil and a meaningful effective stake of no less than 20% to enable it to become an active shareholder.
“We will strive to be transparent to all stakeholders. Our guiding principle is that we will benchmark against leading private equity and sovereign wealth funds,” said Abdul Rahman.“Not all of our investments will be perfect.
"We ask for understanding. But I assure you all investments will not be made with any integrity issues,” he said
“Not all of our investments will be perfect. We ask for understanding. But I assure you all investments will not be made with any integrity issues,” he said
"We will be announcing our first investment shortly. Its a direct investment," he said, adding that the investment would not be in public listed companies.
“Not all of our investments will be perfect. We ask for understanding. But I assure you all investments will not be made with any integrity issues,” he said.
The first investment is expected to be announced by the end of this month. - Malaysian Mirror
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