Malaysia’s sovereign wealth fund Khazanah Nasional has actually safeguarded its choice not to make an early financial investment in Southeast Asia’s ride-hailing and food shipment superapp Grab.
Chief Investment Officer Azmil Zahruddin informed CNBC the fund’s financial investment method was to concentrate on big financial investments– not direct start-up offers.
Khazanah might not close an early offer to money the Malaysian- established Grab.
Other financiers consisting of Singapore’s state-owned financier Temasek ultimately took a stake in Grab and the ride-hailing huge moved its head office toSingapore The business went on to raise $ 4.5 billion and noted on Nasdaq in late 2021 through a SPAC merger with Altimeter Growth Corp, making Grab the most significant listing in the U.S. by a Southeast Asian business.
Khazanah came under criticism for what some have stated was a “missed opportunity” for Malaysia.
Anthony Tan, ceo of Grab Holdings Inc., center right, and Tan Hooi Ling, co-founder of Grab Holdings Inc., commemorate on phase throughout a bell-ringing event as Grab starts trading on the Nasdaq, in Singapore, on Thursday,Dec 2, 2021.
Ore Huiying|Bloomberg|Getty Images
“You have to look at what Khazanah is and what its DNA is,” Zahruddin stated in an unique interview with “CNBC Squawk Box Asia” onThursday
“Our DNA is that we handle big financial investments. [Venture capital] investing is not actually what we do, and it’s not actually our know-how and capability.”
“So what we try to do is, instead of trying to do those investments directly, we actually seed investments into VC funds who then invest into companies around the region.”
Zahruddin concurred, nevertheless, that it was essential for Malaysia to support its business owners and maintain its skill.
He stated Khazanah would continue to assist Malaysian start-ups through an indirect technique of investing into funders that take a stake in these brand-new business and possibly buying them straight after they have actually grown to a size that satisfies the fund’s financial investment requirements.
To that end, Zahruddin stated Khazanah bought Grab’s rival Uber through an intermediary funder which wanted to buy Uber at an early phase.
Khazanah’s financial investment in the foreign-owned Uber rather of Grab, which was begun by 2 Malaysians, raised eyebrows in the Malaysian financial investment neighborhood.
Outlook for equity capital markets
Zahruddin stated the equity capital markets have actually been rather tough and numerous endowment funds that have actually been active in equity capital have actually seen their financial investments fall by approximately 40% in the previous year.
But Khazanah would continue to release funds into the innovation sector and has actually been doing so in the past 10 years.
“In hindsight, it is a good thing that we’re not really able to do direct investments anyway, because that is something that is quite challenging for anyone who’s been in VC,” Zahruddin stated.
Khazanah published an almost 80% drop in yearly earnings in 2021 to 670 million Malaysian ringgit, or $15036 million. The year prior to earnings likewise fell about 60% to RM $2.9 billion.
The sovereign wealth fund stated the fall in earnings was because of its ongoing extension of monetary support to its airline companies and tourist financial investments experiencing Covid-19 disturbances.
Last month, Khazanah revealed it would check out brand-new financial investment chances in Turkey following a conference in between agents from the fund and the Turkey Wealth Fund in Istanbul.