Malaysia-listed information technology and communications company Green Packet Bhd is reportedly teaming up with Singapore-based private equity firm Kendall Court to roll out an RM500 million ($120.98 million) fund through a general partner setup – GP Kendall Capital Partners.
The so-called “Bumi-tech” fund seeks to back later-stage high-tech companies run by Bumiputeras (ethnic Malays and other indigenous peoples).
“It’s in the bumiputra space where we feel that there’s an opportunity for public-private collaboration. This is where we come in terms of funding support, fostering joint ventures (JVs) and consortiums and providing the company with technical know-how and capital, ” Green Packet executive director Tan Kay Yen told local media Starbiz.
Tan said the objective of the Bumi-tech Fund was to push the companies to upscale, expand their local and global networks and eventually export their technology products and services.
Being a limited partner, Green Packet is committing up to 20 per cent or RM100 million ($24.18 million) to the Bumi-tech fund, the first of many funds under the general partner setup.
The fund is said to be looking for commitments from investors in the public and private sectors.
Other limited partners have also voiced their commitments to park money into the fund, such as the Chinese PE fund Orient Excellent, China’s state-owned central financial enterprise China Orient Asset Management and electronic conglomerates Konka and Huaqiang Group.
The Bumi-tech fund is looking at around eight to 10 investments at RM50 million (12.09 million) to RM80 million ($19.35 million) each, according to the report.
The fund will primarily pick significant stakes with strong minority shareholder rights including board representation. It may also selectively consider acquiring majority stakes in partnership with experienced operators or management teams. It will look at sectors such as digital services, semiconductors, tech equipment and software with a targeted return of 2 to 2.5 times, and a targeted IRR of 20- 25 per cent, Starbiz reported.
Tan targets to hit the first close of the fund towards the first quarter of 2021 and the company is also doing due diligence on a few companies.
One of its first major investments would be in chipmaker Silterra, should Green Packet be successful in acquiring it from sovereign fund Khazanah Nasional Bhd.
Green Packet and Kendall Court have yet to respond to DealStreetAsia’s query at press time.
Started in 2004, Kendall Court has a presence in Indonesia, Singapore, the Philippines and Malaysia. Its existing funds and managed accounts focus on investing in hybrid securities ranging from debt, convertible bonds, preference shares and equity.