Malaysia Budget 2016: Khazanah to invest $1.7b in high-impact projects & VC/PE fund

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Setting economic resilience, productivity and innovation as its priorities in the 2016 Budget, the Malaysian government announced that sovereign investment arm Khazanah Nasional Berhad will be allocating MYR6.7 billion and another MYR500 million (a total of $1.7 billion) for high-impact domestic projects and as venture capital and private equity (VCPE) fund, respectively.

Khazanah will be committing the first allocation in nine high-impact domestic projects in sectors such as healthcare, education, tourism and communication software and infrastructure, while the venture capital and private equity portion will include a tourism venture fund of MYR50 million.

An executive from the firm told DEALSTREETASIA that some of the investments identified under the MYR6.7 billion allocation are on-going deals while some will be new ones. As for the MYR500 million announced in the Budget on Friday, this was a new allocation which the firm will make more detailed announcements of after it finalises its investment plans.

In Khazanah’s authorised comments on the Budget, managing director Azman Mokhtar noted that the government has managed “a tough balancing act with the proactive budgetary and redistribution measures, given challenging external and domestic conditions”.

“As the nation’s strategic investment fund, Khazanah and our companies will support these fiscal efforts by intensifying the execution of catalytic and transformational investments in the Malaysian economy,” he said.

Mokhtar added: “These investments include the MYR6.77 billion worth of nine high economic multiplier projects announced by Khazanah on September 14, 2015, and the MYR500 million venture and private equity investments for domestic sectors announced today in the Budget 2016 speech.”

The MYR6.77 billion allocation was announced in September, when Prime Minister Najib Razak revealed several proactive measures to strengthen the country’s economic fundamentals and address the impact of financial turbulence in the global markets on Malaysia’s economy. Khazanah had said in a statement that it has a mandate to accelerate and increase domestic investments over the immediate and medium term.

Related story: Malaysia’s Khazanah announces $1.57b domestic investments to boost local economy

To increase Bumiputera (native people) equity ownership and entrepreneurship, the Prime Minister has also announced allocations of MYR400 million to the private equity firm National Equity Fund Ltd (Ekuinas), MYR250 million to entrepreneurial entity Perbadanan Usahawan Nasional Berhad, MYR150 million to real estate investment corporation Pelaburan Hartanah Berhad and a MYR100 million loan to property developer UDA Holdings for the development of Kampung Baru in Kuala Lumpur.

The national budget, announced by the Prime Minister on Friday, has also placed productivity and  innovation as its second priority, and as efforts to boost those areas, the government seeks to accelerate further local innovation and entrepreneurship.

The Malaysian Global Innovation and Creativity Centre (MaGIC) will receive investment of MYR35 million as a Leading Regional Entrepreneurship and Innovation Hub, which includes a MYR10 million as initial allocation for the Corporate Entrepreneurs Responsibility Fund.

To recap, the government allocated MYR50 million in its Budget 2014, announced October 2013, for the setting up of MaGIC. In November 2014, MaGIC received an additional MYR20 million to jumpstart its social enterprise programme.

“To make the nation a competitive technology hub in the region, MYR1.5 billion is allocated to the Ministry of Science, Technology and Innovation,” prime minister Razak announced.

Declaring 2016 as Malaysia Commercialisation Year, the government will also allocate MYR100 million to the Malaysian Innovation Agency, MYR200 million under the Funding Scheme for Technology and Innovation Acceleration by Malaysia Debt Ventures Berhad.

Elsewhere in the entrepreneurship segment, the government is also putting down MYR30 million for several youth entrepreneurship programmes such as Global Entrepreneurship Community, BAHTERA, GREAT, 1Malaysia Entrepreneur, National Innovation Competition and a Pilot Coding Project in schools.

Furthermore, to accelerate demand-driven innovation activities next year, MYR50 million will be allocated for a Public-Private Research Network.

Read our other story on Malaysia Budget 2016…

Also read:

Malaysia’s Khazanah, Petronas mostly ‘exempted’ from Trans-Pacific pact rules

Malaysia’s startup ecosystem needs better funding channels, support from large corporates: CIMB’s Nazir Razak

MaGIC joins Malaysian government program to encourage native technopreneurs

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.