PETALING JAYA: Government-linked private equity fund management company Ekuiti Nasional Bhd (Ekuinas) plans to invest RM400 million across all sectors, especially in the technology, healthcare, and consumer-related spaces, in financial year 2022 (FY22).

Ekuinas CEO Syed Yasir Arafat Syed Abd Kadir said: “We have looked at a lot of deals in the technology space, essentially because that seems to be the overriding theme and where we see most opportunities coming from.

“It requires agility. We look at deals done in the past, and we need to adopt new trends because for technology deals, you wouldn’t want to be doing buyout.

“Second is healthcare. We have made one investment in the healthcare sector. It’s another sector where we see quite a lot of potential,” he told the media during Ekuinas’ FY21 results briefing yesterday.

Syed Yasir Arafat continued: “We intend to explore an IPO (initial public offering) for one of our companies that’s involved in the retail segment, for example Al-Ikhsan, but probably not this year, maybe next year.”

For 2021, Ekuinas recorded consolidated revenue growth of 12.1% and earnings before interest, tax depreciation and amortisation (ebitda) growth of 28.0% from FY20’s performance. These have contributed to increasing the total shareholders’ value for portfolio companies to RM7.7 billion, or two times the invested capital compared with RM7.0 billion in the previous year.

The private equity market’s performance in Malaysia was relatively subdued despite growth in fund and asset allocation with the Covid-19 pandemic situation in mid-2021 delaying broad-based recovery in economic activity, Ekuinas disclosed.

“However, with the steady and gradual rebound that we see, we are ready to capitalise on opportunities that are aligned to our investment strategies,” Syed Yasir Arafat said when commenting on the outlook for 2022.

“In 2021, digitalisation was an impactful theme for us with almost all our portfolio companies undergoing digitalisation enhancement as a critical core of business operations and will continue to be a guiding force as we move forward.”

Another key component that will guide its investment strategy is the establishment and implementation of its environmental, social and governance framework, he said.

As of FY21, Ekuinas’ total cumulative investments stood at RM4.4 billion, which comprised 70 investments – 47 direct and 23 outsourced – which generated a total economic deployment of RM5 billion, together with private sector partners.

In terms of direct investments, the Ekuinas Direct (Tranche II) Fund recorded strong growth with a gross portfolio return of RM654 million, generating a gross internal rate of return (IRR) of 12.1% a year and a net IRR of 8.6%, marking a significant increase from last year which saw the fund recording a gross portfolio return of RM571.2 million.

Meanwhile, Ekuinas Direct (Tranche III) Fund recorded a gross portfolio loss of RM125.3 million, translating into a negative gross IRR of -4.3% a year.

The Ekuinas Direct (Tranche IV) Fund is still in the early stages of investment. It made its maiden foray into the pharmaceutical space, a distributor and marketer of local pharmaceutical and supplement products Medispec (M) Sdn Bhd, in February 2021.

In relation to outsourced investments, the Ekuinas Outsourced (Tranche I) recorded gross portfolio return of RM60.5 million, achieving a gross IRR of 3.3% a year and a net IRR of 2.5% a year while Ekuinas Outsourced (Tranche II) Fund recorded a gross portfolio loss of RM4.4 million, translating into an annual negative gross IRR of -0.8% .

Ekuinas has increased the total bumiputra equity ownership in its portfolio companies to RM5.9 billion, or 1.5 times of capital invested compared with RM5.6 billion in 2020. It has also helped to increase the pool of bumiputra managers by 19.4% and bumiputra employees by 12.3%, up from 13.3% and 10.5% respectively in 2020.