By PETER STEIN
KUALA LUMPUR, Malaysia—A $30 billion Malaysian state-owned fund is testing the premise that promoting national interests is compatible with making a profit.
Those, in fact, are the twin goals that drive Khazanah Nasional Bhd., the government's investment arm that prides itself on its returns—it says its compound annual growth rate is running around 13% a year, up from 9% at the end of last year—and its ability to seed new industries.
"We like to think you can have the best of both worlds," Azman Mokhtar, Khazanah's managing director, said in a rare interview. "Unabashedly," he said, "we go out and want to create jobs."
Khazanah isn't one of the biggest players on the sovereign-wealth scene, but with a portfolio valued at 92.2 billion ringgit ($29.8 billion) at the end of last year, it still is a giant-sized investor by most standards. Like its bigger, better-known Singaporean counterpart, Temasek Holdings Pte. Ltd., Khazanah is both a fund and a holding company. It owns large swaths of the corporate sector through stakes in the country's airline, its post office, its national car maker and other businesses.
Since he took charge of Khazanah in May 2004, Mr. Mokhtar, now 49 years old, has been shifting out of noncore holdings and investing in new sectors considered strategically important for the future of this Muslim-majority country of 28 million people. Health care, leisure and tourism, technology and sustainable development are among the areas Khazanah targets.
In the universe of sovereign funds, Khazanah's aspirations set it apart from some Asian peers. Temasek likes to consider itself a professional, returns-oriented investment fund that just happens to be state-owned. It is closer in philosophy to Mubadala Development, a development fund run by Abu Dhabi aimed at producing financial returns and "tangible social benefits" for the emirate.
Khazanah's state-backed heft can be controversial when it is wielded against private-sector players. When upstart budget carrier AirAsia Bhd. wanted to build a new airport to accommodate its burgeoning traffic and avoid high landing fees at Kuala Lumpur International Airport, it met opposition from Khazanah, the biggest investor in both Malaysia Airports Bhd., the company that runs KLIA, and Malaysia Airlines. The government brokered a compromise under which Malaysia Airports is building a new budget terminal for AirAsia's use near KLIA, with AirAsia participating in the design.
The fund's footprint outside Malaysia is fairly modest. About 20% of Khazanah's assets are overseas, including those held through its portfolio companies, though its ambitions are expanding.
In July, Khazanah made its splashiest move yet abroad by agreeing to pay $2.6 billion for the 76.1% of Singapore hospital-operator Parkway Holdings Ltd. that it didn't already own. The takeover, which forced out fellow shareholder and rival bidder Fortis Healthcare Ltd. of India, was likely the first time a sovereign-wealth fund successfully launched a hostile bid outside its borders.
Hostile, that is, to Fortis. The Indian company, controlled by the Singh family of pharmaceutical giant Ranbaxy Laboratories Ltd., thought it won effective control of Parkway when it took over a 23.9% stake from private-equity firm TPG this past March for 960 million Singapore dollars ($734.7 million).
Parkway, along with its Malaysian affiliate Pantai Group, are attractive for their 15% underlying growth. But two things make this an especially important investment for Khazanah, Mr. Mokhtar said. On the one hand, Malaysia is keen to build up health-care expertise to capitalize on regional demand for high-quality medical services. And it offers a chance to leverage warming ties between Malaysia and Singapore, neighbors with a history of off-and-on political tensions.
The two governments recently signed a deal that largely resolves a land dispute and establishes a joint venture to create health-care facilities in Iskander, a Malaysian district adjacent to Singapore.
"I see this as a confluence of both strategic imperatives [and] commercial imperatives," said Mr. Mokhtar, a former research director for Malaysia at both UBS AG and Salomon Smith Barney. Ties between Malaysia and Singapore, he said, are "a critical bridge that we need to build in order for Asean [the Association of Southeast Asian Nations] businesses to grow and flourish, in order to have scale in this kind of a global competition now with China and India."
Source: online.wsj.com
No comments:
Post a Comment