KUALA LUMPUR (May 15): Ekuiti Nasional Bhd (Ekuinas) said to date it has recorded total realisation proceeds of RM2.3 billion, derived from divestment activities, dividend income and interest income.

Ekuinas chief executive officer Syed Yasir Arafat Syed Abd Kadir said this was despite 2017 having been a particularly challenging year for the private equity space, amid geopolitical tensions and volatility in the oil & gas industry, which was reflected in a sombre market.

“The financial performance of Ekuinas’ portfolio companies were mixed, with companies such as Al-Ikhsan Sports and Orkim Sdn Bhd having registered strong performances for FY2017, while companies within the O&G as well as food & beverage sectors showed weaker performance due to market forces,” Syed Yasir said at a briefing on the group’s performance for the financial year ended December 31, 2017 (FY17).

Regardless, the government-linked private equity firm said it had increased the number of direct and outsourced investments from a total of 53 in FY2016 to 58 in FY2017 (35 being direct, 23 being outsourced), with a total committed investment of RM3.6 billion compared with RM3 billion in 2016.

Bumiputera equity ownership had also increased to RM4.4 billion or 1.5 times Ekuinas’ invested capital, while total shareholders’ value saw an increase of RM6.3 billion or 2.2 times the total invested capital, it said.

Additionally, Ekuinas said FY17 saw the closure of its maiden fund, Ekuinas Direct (Tranche 1) Fund or Fund 1, which had reached full deployment with assets realised, recording a gross portfolio return or RM476.7 million, or an annualised gross internal rate of return (IRR) of 10.1% and net IRR of 6.5%.

Moving forward, Syed Yasir said Ekuinas foresees 2018 to be another challenging year for the market which may impact Ekuinas’ portfolio companies due to internal and external factors such as changes in the global economic and business landscape brought on by the surge in mega funds from the developed countries, Industrial Revolution 4.0 and disruptive technology.

When asked to comment on changes facing the new government, Syed Yasir only said it was too soon to say as Ekuinas awaits for direction; however he added that the market had done well to adapt to the changes over the past week.