State institutions that provide continuity of support with capital and capacity-building throughout market cycles will help ensure a robust private markets ecosystem even through difficult periods, said Khazanah Nasional managing director Amirul Feisal Wan Zahir.
Speaking at the Malaysian Venture Forum 2025 in Kuala Lumpur recently, Amirul said, “In a region as diverse as ours, [institutions] provide the continuity that allows talent, capital, and technology to compound rather than reset at every cycle. They maintain discipline where markets overreact and remain present when others pull back.”
“The ecosystems that held up better were not those with the most capital, but those anchored by strong and steady institutions…that stayed present long enough for founders to keep building,” he added. “That is the approach Malaysia’s institutions have taken.”
Indeed, Malaysia has attracted some $360 million in venture capital funding over the past two-and-a-half years, Amirul said.
Further, he pointed to the need for the region to rethink failure. “If we want deeper innovation, we must allow found founders the time and trust needed to build something enduring.”
To that end, the Malaysian sovereign wealth fund, through its initiatives Dana Impak and fund-of-funds programme Jelawang Capital, along with other state-owned institutions such as the public servant pension scheme KWAP, have launched a series of initiatives to drive growth through the private capital value chain.
Dana Impak has a 1-billion-ringgit mandate to drive the growth of Malaysian mid-tier companies through private credit and private equity (PE) investments. It will also allocate 1 billion ringgit for investments in the domestic semiconductor and advanced manufacturing industries.
Khazanah, which manages some $25 billion in assets, has also allocated 1 billion ringgit to Jelawang Capital to develop the local venture ecosystem.
Earlier this year, Jelawang Capital selected a clutch of venture capital general partners (GPs)—local emerging managers as well as regional, more mature firms—to invest in local startups and drive their international growth. It is set to announce its next batch of GP selections shortly.
KWAP has unveiled three key schemes: Dana Pemacu, a 6-billion-ringgit co-GP investment programme that pairs international fund managers with local players; Dana Perintis, through which it will allocate 500 million ringgit in domestic VCs and startups, through direct and fund investments; and, most recently, a 2-billion-ringgit allocation for climate-focused investments across PE, real estate, and infrastructure under Dana Iklim+.
In a fireside chat at the same event moderated by DealStreetAsia’s Joji Philip, Khazanah’s Director of Investments and Head of Dana Impak, Kayse Foo, highlighted the institution’s three areas of focus: Seeding venture capital and startup investments through Jelawang Capital; supporting domestic mid-sized companies with growth capital and talent-building; and driving growth in the country’s advanced manufacturing and semiconductor industry.
Khazanah’s Director of Investments and Head of Dana Impak Kayse Foo
“We can see the connection through the different stages of companies. We’re trying to transform firms of different types across different stages, to seed a pipeline that larger firms or other PE and VC funds can continue to invest in,” Foo explained.
Through longer-term, patient capital, she added, “It’s catalysing the venture generation [and] stirring the growth of mid-sized companies in the hope that larger firms can emerge through that stage of the lifecycle.”
But, Foo also stressed that the initiatives’ success would not depend solely on the dollars invested. Rather, the programmes’ impact will be gauged by how much more global capital can be drawn into the ecosystem; how the private capital industry has developed in terms of local managers; and eventually, the overall competitiveness of Malaysian firms.
To be sure, the latest initiatives follow various schemes employed in earlier years, also in a bid to drive growth in the private markets in Malaysia.
Foo pointed out that the latest programmes are different in that they are being deployed at a much larger scale than before, and are applied to much earlier stages of companies. And, the institutions are looking at a more diverse range of companies across the ecosystem.
However, Khazanah and KWAP have also come under fire recently, after some direct VC bets went awry.
In July 2023, KWAP invested $30 million in eFishery, the Indonesian aquaculture startup that has since gone under following fraud allegations.
In 2018, Khazanah invested 27 million ringgit to acquire a direct 9% stake in FashionValet, a homegrown but still loss-making fashion e-commerce platform, to help it grow via online-to-offline sales. However, with the COVID pandemic that struck after, those plans remained unfulfilled. In late 2023, Khazanah, with another Malaysian institutional investor, Permodalan Nasional Berhad, sold its stake in the company for a combined 40-million-ringgit loss.
Following a Public Accounts Committee inquiry held earlier this year, Khazanah said it remains committed to supporting Malaysia’s startup and VC ecosystem, noting that while high-risk, the investments will ultimately work to boost the country’s economy and competitiveness.
“We are the strategic investment arm for the Government of Malaysia, so the expectation is rightful, it’s normal,” Foo said.
“We do need to ensure we are also doing the right thing. How do we ensure, as an institutional investor, that we are taking the right calculated risk? Do we have the governance and processes that put us in check to ensure we are doing the right due diligence, that we are taking the right steps and not just going through the right governance threshold, approval process?” she added.
Foo also acknowledged that the institution needs to communicate better, “because we have a greater responsibility to keep the public more informed.”
Khazanah posted 5.1 billion ringgit in profit from operations for 2024. Net asset value for the year rose to 103.6 billion ringgit, from 84.4 billion ringgit the year before.
Said Khazanah’s MD Amirul: “The region does not need to become a global powerhouse. It needs to function predictably as a place where good companies can be built.”
