Malaysia's pension fund KWAP launches $1.27b PE investment strategy Dana Pemacu

Malaysia's pension fund KWAP launches $1.27b PE investment strategy Dana Pemacu

KL Tower in Kuala Lumpur, Malaysia.

Malaysia’s public service retirement fund Kumpulan Wang Persaraan (KWAP) has allocated RM6 billion ($1.27 billion) towards its private equity investment strategy under its Dana Pemacu initiative.

DealStreetAsia had earlier reported on the upcoming launch of Dana Pemacu.

As part of the PE strategy, the fund will set aside nearly 50% of the corpus – RM3 billion ($638 million) – for Shariah-compliant investments. The allocation is seen to unlock the potential of Islamic equity capital.

This announcement was made during the Global Forum on Islamic Economics and Finance by Prime Minister Datuk Seri Anwar Ibrahim.

The PE programme will be implemented through Separately Managed Account (SMA) funds, which will be set up as collaborations between local talent and international investment managers across three asset classes: private equity, infrastructure, and real estate. The plan is to create 12 such funds with four under each asset class. 

Dana Pemacu will target investments in key economic sectors including food security, education, silver economy and healthcare, energy transition, digital economy, financial inclusion, and other impact-related critical themes under the Ekonomi MADANI framework, according to an official release.

“Dana Pemacu’s approach of partnership with domestic and international investment managers will help strengthen Malaysia’s private markets ecosystem,” said Minister of Finance II Datuk Seri Amir Hamzah Azizan, who officiated the launch of Dana Pemacu.

With Dana Pemacu as an investment strategy, KWAP seeks to strive for optimal returns for the Fund to assist the Federal Government in financing its pension liabilities.

“Our plan is to deploy this investment through the creation of partnership models between local talents and international fund managers, which will serve to catalyse the private market investment ecosystem in Malaysia. Furthermore, this initiative will bring global best practices and expertise to the local market as well as driving knowledge transfer and industry network – enhancing local talents,” KWAP chief executive officer Datuk Hajah Nik Amlizan Mohamed said.

 The new programme follows the launch of KWAP’s 500-million ringgit ($106.68 million) vehicle—Dana Perintis— last September. The vehicle is tasked to invest in startups and venture capital funds over the next 18-24 months.

In February, the vehicle announced the first batch of investments worth 100 million ringgit ($20.93 million)—in two startups, Bateriku and Lapasar; and two venture capital fund commitments. 

The two funds that received investments from KWAP are Vynn Capital, a home-grown fund that invests from the seed stage with a focus on the mobility and supply- sectors; and Antler—a global early-stage VC investing in pre-seed to Series A and beyond.

KWAP, which is responsible for the retirement savings of civil servants in Malaysia, manages a total fund size of approximately RM184.5 billion ($39.33 billion). It has invested in 54 private equity funds across multiple strategies and geographies, with exposure predominantly in developed markets (i.e. North America, Europe & North Asia), and selectively in developing Asia. 

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