KUALA LUMPUR (Sept 28): Ekuiti Nasional Bhd (Ekuinas) said its Ekuinas Direct (Tranche II) Fund recorded a gross portfolio return of RM582.9 million for the financial year ended Dec 31, 2019 (FY19).
The fund generated an annualised gross internal rate of return (IRR) and net IRR of 13.5% and 9.6% respectively, said the government-linked investment company (GLIC) in a statement today.
Meanwhile, Ekuinas Direct (Tranche III) Fund recorded a gross portfolio loss of RM170.5 million, translating into a negative annualised gross IRR of 10.8%, which was attributed to reduced valuations of several portfolio companies.
Ekuinas said it had put in place stringent and comprehensive value creation initiatives to enhance the competitiveness of the respective companies, as well as execute turnaround plans to improve their operational and financial performances.
It said it was selective in deploying capital during the year and channelled its investment efforts into follow-on investments.
It committed a total of RM205.9 million, which included a RM20 million investment in Orkim Sdn Bhd, RM183 million in Icon Offshore Bhd and RM2.9 million in Exabytes Capital Group Sdn Bhd.
Ekuinas exited two of its portfolio companies, namely APIIT Lanka Pvt Ltd and PrimaBaguz Sdn Bhd, in line with its move to crystallise its investments under Ekuinas Direct (Tranche II) Fund.
The divestments generated gross IRRs of 17.7% and 22.1%, and money multiples of 2.2 and 3.8 times the capital invested, respectively.
The realisation proceeds from Ekuinas’ divestment activities in 2019 stood at RM384.6 million, bringing the company’s total realisation, including income from dividends and interests, to RM3.1 billion.
Ekuinas chairman Raja Tan Sri Arshad Raja Tun Uda said 2019 was a milestone year as the fund commemorated the 10th year since its inception.
“Our aim remains to be the partner for growth for Malaysia’s next generation of leading companies while promoting equitable and sustainable bumiputera wealth creation and economic participation through the private equity (PE) model.
“Our commercial and social performance over the decade was a reflection of the effectiveness of our unique PE model strategy in creating value for companies, and the returns we generate allow us to execute our social objective through assisting and elevating the bumiputera community,” he said.
Ekuinas has increased the overall bumiputera equity ownership to RM5.4 billion — 1.5 times the capital invested — leading to an increase in total shareholder value of RM6.9 billion, translating into 1.9 times the capital invested.
The fund also increased its bumiputera talent pool in its portfolio of companies, with management and employees recording a rise of 23.5% and 14.1% respectively since its entry.
“Over the last decade, the PE industry reflected a significant change in deal numbers and recorded a growth rate of almost fivefold.
“Globally and in Malaysia, market dynamics have shifted and seen a significant transition in capital allocation from public to private markets. PE as an asset class in Malaysia has come a long way, and I am glad to see that the vibrancy of the PE industry has improved tremendously since our establishment in 2009,” said Ekuinas chief executive officer (CEO) Syed Yasir Arafat Syed Abd Kadir.