Cahya Mata Sarawak's private equity unit to double portfolio firms this year

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KUALA LUMPUR (June 9): CMS Opus Private Equity Sdn Bhd expects to double its investment portfolio companies to around 16 this year from eight, while forecasting growth of its asset under management (AUM) to reach RM500 million by year-end.

At present, CMS Opus’ AUM stands at RM300 million, some of which are sourced from government-linked funds. Depending on the nature of the investment, CMS Opus allocates between RM25 million and RM40 million to be used as the ticket price - industry jargon for investment inflow - into each company.

Speaking on the sideline of the second Southeast Asia Venture Capital and Private Equity Conference here this afternoon, CMS Opus managing director Azam Azman hopes to ride growth of investee companies and AUM on the back of positive outlook of construction, manufacturing and services sectors.

“We have appetite for manufacturing companies as well as retail and services companies that could provide good return to us. For example last year, we exited all our oil and gas portfolio when the crude oil price is at around US$100 per barrel. All of our exits then were made at 30% internal rate of return, and at least 2.5 times annual return,” he said.

According to Azam, CMS Opus does not limit its exit option by listing its portfolio companies, but may pursue other areas of growth that could yield other opportunities.

“Initial public offering is one option but it may not be the ultimate goal, as you have to ask yourself what kind of values are you creating to the shareholders. There are many ways to realise the investment, and it all depends on the strategy of the fund and investment manager,” he added.

Meanwhile, CMS Opus had in 2013 established its third fund called COPE Opportunities 3 (COPE 3) via Ekuiti Nasional Bhd’s second-tranche outsourced fund managers programme.

The fund, said Azam, is expected to pursue minority stakes in growth companies where it will serve as an active shareholder with a clear proposition to add value.

It is worth noting that construction outfit Cahya Mata Sarawak Bhd – controlled by the family of Sarawak governor Tun Abdul Taib Mahmud – has a 51% stake in CMS Opus held via CMS Capital Sdn Bhd.

Established in 2006, CMS Opus was mandated to achieve long-term capital gains through investments in unlisted and emerging companies in Malaysia and the Asean region, adhering to shariah-compliant investment principles.

For the financial year ended Dec 31, 2014 (FY14), CMS Opus, together with other strategic investment businesses, contributed less than 1% or RM11.39 million to Cahya Mata Sarawak’s total revenue of RM1.673 billion.

According to Cahya Mata Sarawak’s latest annual report, CMS Opus returned investment capital of RM10.17 million in FY14, which included a gain of RM2.33 million to its investors.