Private equity fund to boost Bumi stake

Ekuinas will focus its investments on sectors with high growth potential, in line with supporting the New Economic Model, says Datuk Seri Najib Razak

The government will set up a private equity fund, Ekuiti Nasional Bhd (Ekuinas), that will invest in unlisted companies in a move to boost Bumiputera participation in the economy. Prime Minister Datuk Seri Najib Razak said the new investment institution will have an initial capital of RM500 million but this will rise to RM10 billion.

"Ekuinas will focus its investments on sectors with high growth potential, in line with supporting the New Economic Model," Najib said in his keynote address at the Invest Malaysia conference here yesterday. Ekuinas would be one of the ways for Malaysia to increase the Bumiputera share of corporate equity to 30 per cent from about 19.4 per cent now, Najib said.

Although Ekuinas will invest in both Bumiputera and non-Bumiputera companies alike, there will be a specific Bumiputera agenda to develop Bumiputeras through such investments, said Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop.

While specifics will be announced later, Nor Mohamed said the fund would be run by professionals but funded and owned by the government. "It will come under the supervision of the EPU but reports to the prime minister," he said at a media briefing.

Ekuinas, to be established soon, will buy into companies in high growth sectors such as education, medical tourism, oil and gas and ICT. "There is one space that has not been filled and that is the unlisted SMEs (small and medium enterprises) and companies.

In the big scheme of things, the unlisted companies are bigger in size, in terms of number and value," Nor Mohamed said. He added that Ekuinas was different from Permodalan Nasional Berhad (PNB) as the latter pools together retail investments to purchase equities in listed companies.

Najib said Ekuinas will also jointly invest with private sector funds. Corporate figures said Ekuinas was timely as it provides capital aid for entrepreneurs. "One of the biggest challenges previously was in terms of capital for the Bumiputera entrepreneurs and this makes the fund available to them," said Maybank group president and chief executive officer Datuk Seri Abdul Wahid Omar.

Axiata Group Bhd chief executive officer Datuk Seri Jamaludin Ibrahim welcomed Ekuinas as it would develop quality Bumiputeras. Bursa Malaysia director Datuk Saiful Bahri Zainuddin said Bumiputera companies and investors now had another avenue to participate in capital markets. "They will no longer be passive investors as they will now be able to participate or learn the trade or industry. This can be done through the management or running of the company."