KUALA LUMPUR (May 24): Government-linked private equity (PE) fund management company Ekuiti Nasional Bhd (Ekuinas) said its Ekuinas Direct (Tranche II) Fund recorded strong growth with a gross portfolio return of RM654 million for the financial year ended Dec 31, 2021 (FY21), compared with RM571.2 million a year earlier.
The fund generated a gross internal rate of return (IRR) of 12.1% per annum (p.a.) and a net IRR of 8.6%, according to Ekuinas’ statement on Tuesday (May 24).
Howevever, another fund, Ekuinas Direct (Tranche III), recorded a gross portfolio loss of RM125.3 million, translating into a negative gross IRR of -4.3% p.a.
“[Meanwhile,] the Ekuinas Direct (Tranche IV) Fund is still in the early stages of investment and is expected to perform well, backed by the strong performance of its underlying asset, Medispec (M) Sdn Bhd, a leading distributor and marketer of local pharmaceutical and supplement products. This investment which was made in February 2021 signified Ekuinas’ maiden foray into the pharmaceutical space,” the statement read.
In relation to outsourced investments, Ekuinas Outsourced (Tranche I) recorded a gross portfolio return of RM60.5 million, achieving a gross IRR of 3.3% p.a. and a net IRR of 2.5% p.a.
On the other hand, the Ekuinas Outsourced (Tranche II) Fund recorded a gross portfolio loss of RM4.4 million, translating into a negative gross IRR of -0.8% p.a.
For the year under review, Ekuinas recorded a consolidated revenue growth of 12.1% and earnings before interest, taxes, depreciation and amortisation (EBITDA) growth of 28%, well above -12.8% and -14.9% respectively in FY20.
“While 2021 tested Ekuinas’ resilience as a company and as a PE investor given the uncertain and challenging economic environment brought on by the [Covid-19] pandemic and resulting lockdowns, Ekuinas remained active in efforts to preserve our portfolio performance in a volatile environment and create long-term value for our investors, companies, people and the wider community,” said Ekuinas chairman Raja Tan Sri Arshad Raja Tun Uda.
In FY21, Ekuinas successfully increased total bumiputera equity ownership of its portfolio companies to RM5.9 billion, or 1.5 times the capital invested, from RM5.6 billion in 2020.
“We also helped to increase the pool of bumiputera managers and employees by 19.4% for bumiputera managers and 12.3% for bumiputera employees, up from 13.3% and 10.5% respectively in 2020.
“These contributed towards increasing total shareholder value of portfolio companies to RM7.7 billion, or two times the invested capital, from RM7 billion in the previous year, reflecting Ekuinas’ success in leveraging the PE business model to promote wealth creation for bumiputeras and all Malaysians,” Arshad added.
As of FY21, Ekuinas’ cumulative investment stood at RM4.4 billion, which comprised 70 investments covering 47 direct investments and 23 outsourced programmes that consequently generated total economic deployment of RM5 billion, together with private-sector partners.