This article first appeared in The Edge Financial Daily on December 20, 2019

KUALA LUMPUR: ValueCAP Sdn Bhd, an investment holding company that is equally owned by Khazanah Nasional Bhd, Kumpulan Wang Persaraan (Diperbadankan) and Permodalan Nasional Bhd, seeks to exit the asset management business.

In a statement yesterday, ValueCAP said it is exploring various strategic options for its two wholly-owned licensed asset management subsidiaries, VCAP Asset Managers Sdn Bhd (VCAM) and i-VCAP Management Sdn Bhd (i-VCAP), including divesting or winding up the companies.

This means the 16-year-old asset management company will cease operations.

Both VCAM and i-VCAP currently manage wholesale funds, while i-VCAP also manages exchange-traded funds (ETFs).

“Both companies are proposing to terminate their respective wholesale funds, while i-VCAP is exploring various options in relation to the management of the ETFs, including the possibility of transferring the ETFs to another licensed fund management company,” ValueCAP said.

The group also said any decisions made on VCAM, i-VCAP and the funds managed by them will be subject to the necessary regulatory approvals.

“In the interim, VCAM and i-VCAP will keep clients and unitholders informed of any developments on this matter as and when updates are available,” ValueCAP said.

“The group will also work closely with the relevant authorities during this period to ensure the exercise follows due process and complies with all regulatory requirements. Further updates will be provided in due course, subject to consultation with the relevant stakeholders,” it added.

ValueCAP was incorporated in October 2002. On the commencement of operations in 2003, ValueCAP started managing proprietary investments, which are investments of its own funds — as mandated by its shareholders. With an initial RM5.1 billion fund from shareholders, the average annual return on funds managed by ValueCAP since inception over a 10-year period was over 11%, with the equity portion of the fund consistently outperforming benchmark returns. ValueCAP’s assets under management peaked at over RM17.2 billion in 2010.

In 2015, shareholders pumped in another RM20 billion into ValueCAP. According to Bloomberg, ValueCAP’s equity portfolio amounts to US$760 million.