Malaysia government-linked private equity firm Ekuiti Nasional Bhd (Ekuinas) on Thursday reported a gross portfolio return of 571.2 million ringgit ($137.2 million) for its 1 billion ringgit ($240 million) second fund.
Ekuinas Direct (Tranche II) Fund generated a gross internal rate of return (IRR) of 11.9% per annum and a net IRR of 8.2%, Ekuinas said as it announced its financial results for the financial year ended Dec 31, 2020.
The PE firm said its 1.5 billion ringgit ($360 million) third fund, Ekuinas Direct (Tranche III) Fund, recorded a gross portfolio loss of 75.4 million ringgit ($18 million), translating to a negative gross IRR of 3.2% per annum. However, it said that the loss represents an improvement of 7.6% over 2019.
“The year 2020 started off slow. Overall, private equity (PE) activities fell off sharply in the first quarter, as activities or decisions were put on hold due to the restrictions on travel as well as a pullback in sentiment, with confidence taking an abrupt turn for the worst. However, the disruption brought about by the pandemic did not last long and the PE industry saw a rapid rebound, as reflected in the third quarter numbers of 2020,” said Ekuinas CEO Syed Yasir Arafat Syed Abd Kadir.
Throughout the fiscal year, the PE firm committed 250.2 million ringgit in investments to strengthen its portfolio, bringing its cumulative investment to 4.4 billion ringgit in 42 companies.
Among notable deals sealed by Ekuinas in 2020 was the acquisition of a majority stake in local pharmaceutical company Medispec and investments in Icon Offshore Berhad and Flexi Versa Group. It also completed the sale of homegrown desserts and beverage company Coolblog Apps.
Established in 2009, Ekuinas invests in Malaysia-based businesses, with an emphasis on core sectors such as education, oil and gas, fast-moving consumer goods (FMCG), retail and leisure, healthcare and services. Over the years, it has also broadened its focus to include digital solutions and manufacturing.
The firm’s latest fund is its fourth fund, which was launched in 2019 with a corpus of $240 million. Going forward, the firm said its focus will be on “intensifying deal sourcing and portfolio management, whilst maintaining the overall corporate strategic direction.”