MALAYSIA Law and Practice Contributed by: Munir Abdul Aziz, Ee Von Teo and Addy Herg, Wong & Partners
(the public sector pension fund manager), LTAT (the Armed Forces Pension Fund Board) and Lembaga Tabung Haji (the national pilgrim funds board). In recent times, Malaysian conglomerates, whether family or GLIC held, have adopted a more proac - tive approach in portfolio management to realise greater value or to de-leverage or to conform to strategic asset allocation policies; and with that a number of demergers, carve-outs or divestitures of non-core assets and businesses have followed. • Seek opportunities to create further value in target businesses that have been invested in by other private equity firms. Malaysia has also seen an increasing number of transactions between private equity firms. A recent example would be the acqui - sition by TPG’s The Rise Fund along with co-inves - tors Employees Provident Fund and Kumpulan Wang Persaraan (Diperbadankan) of a controlling stake in Asia Pacific University of Technology and Innovation (APU) from KV Asia Capital, a leading private equity fund focused on mid-market invest - ments across South-East Asia. KV Asia Capital had previously acquired APU from Ekuinas, the Malay - sian government-linked private equity firm. Each private equity investor in APU has created value in APU, and both Ekuinas and KV Asia have exited with enhanced valuations. • Pursue consumer goods and retail opportunities in secondary cities and towns in Malaysia. Malay - sia’s continuing overall steady economic growth, combined with a relatively young population with increasing amounts of disposable income, has fuelled expansion in the consumer goods and retail sector, including in secondary cities and towns in Malaysia. A number of private equity firms have been targeting businesses with a strong record of growth in outlets in Malaysia’s secondary cities and towns. There are several examples of these, including dollar-store retail chain Eco-Shop which recently completed a successful listing on Bursa Malaysia (which enabled an exit for the private equity firm Creador), retail tea business Tealive (also a Creador investee company) and Al-Ikhsan Sports (in which Ekuinas is an investor), and optical chain business A-Look group (in which Aprospec was an investor that exited via a sale to the global optical chain group EssilorLuxottica).
• Seek to unlock value in digital transformation and leverage their close proximity to Singapore, a major regional data hub. Singapore’s emergence as a major data hub and the scarcity of land and power in the city state, as well as the open invest - ment policies of the Malaysian government, have sparked tremendous recent growth in the data cen - tre industry, which in turn is fuelled by rapid global trends in digital transformation, including genera - tive artificial intelligence and cloud computing. Data flows are critical to modern global business and Malaysia has an extremely strategic geograph - ical location, which has also helped to make it a strong link in the global supply and service chain. One of the largest private equity transactions to have closed in 2024 in the data centre industry was the acquisition of AirTrunk’s data centre platform by Blackstone from Macquarie Asset Management and the Public Sector Pension Investment Board. Private equity interest in digital infrastructure is expected to continue to grow following the recent surge in data centre projects in Malaysia and the establishment of the Johor-Singapore Special Eco - nomic Zone (JSSEZ). Recently, private equity firms have been increasingly drawn to Malaysian infrastructure assets due to their stable revenue streams, scalability and growth pros - pects. Infrastructure assets and public service con - cessions are particularly attractive, offering oppor - tunities for long-term returns. A prime example of a substantial private equity transaction in this space in 2024 involves Global Infrastructure Partners’ involve - ment in a consortium alongside Malaysia’s sovereign wealth fund Khazanah Nasional Berhad, Malaysian statutory pension fund Employees Provident Fund and Abu Dhabi’s sovereign wealth fund ADIA to take pri - vate Malaysia Airports Holdings Berhad (MAHB). The takeover is based on a total equity value of MYR18.4 billion (approximately USD4.2 billion). A likely future trend will be investments in the compa - nies that provide services to facilitate the roll-out of the current administration’s ambitious energy transi - tion plan: the National Energy Transition Roadmap, which aims to increase the proportion of renewable energy supply to 70% of Malaysia’s total capacity by 2050. Malaysia also recently lifted the ban on exports
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