By Lee Wei Lian
PETALING JAYA, Feb 9 – The government-sponsored new RM10 billion bumiputera private equity fund Ekuiti Nasional Berhad (Ekuinas) has set a minimum investment return target of 12 per cent but aspires to deliver up to 20 per cent.
Ekuinas is a government-linked private equity fund that was launched in September last year to promote sustainable bumiputera participation in the economy following the Najib Administration’s move to open up the economy.
It also said today that has committed itself to following best practices in public disclosure.
“We will strive to be transparent to all stakeholders,” Ekuinas CEO Datuk Abdul Rahman Ahmad told a press conference here today.
“Our guiding principle is that we will benchmark against leading private equity and sovereign wealth funds.”
Ekuinas will focus on buy-outs of non-core assets of GLCs and MNCs and other corporates, exits by shareholders of existing companies and taking stakes in existing bumiputera growth companies.
It will look at six target sectors – education, oil and gas, fast moving consumer goods, healthcare, retail and leisure and services.
It was allocated an initial amount of RM500 million which will increase to RM10 billion “over time”. It also expects to invest RM5 billion from now till 2015, both directly and indirectly through outsource partners.
The first investment is expected to be announced by the end of this month.
Abdul Rahman said that the company will be investing RM1.3 billion under its first tranche of funds, of which RM1 billion will be made directly and the rest by its outsource partners.
Direct investments have a three- to five-year investment horizon and will be focused on larger deal sizes of RM50 million and above and will require Ekuinas to have meaningful control of the company.
Abdul Rahman said that Ekuinas expects to exit investments via listings and trade sales but its preferred method would be to sell their investments to institutions especially government linked investment institutions.
He also said that no capital repayment schedule has been worked out but funds realised through exits will be rolled over to seed new funds under Ekuinas management.
“The (government’s) objective here is sustainability,” said Abdul Rahman, who used to head property developer MRCB Berhad.
He also wanted to manage public expectations of Ekuinas and asked for understanding that all investments carried risk.
“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.
Ekuinas also announced that it is committed to a full and fair disclosure policy.
“The adoption of a full disclosure policy reflects Ekuinas’ commitment to transparency consistent with its role as a government funded entity with high public interest as well as being in line with the government’s recent effort to promote greater openness and accountability in all its activities,” said Ekuinas chairman Tan Sri Arshad Raja Uda at the briefing.
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