Ekuinas’ Private Equity Model
Objectives
Ekuinas is a commercially driven organisation with the primary objective of delivering financial value on its investments. The Company maintains strict commercial discipline by setting clear Internal Rate of Return (IRR) targets.
We firmly believe that only through financial discipline and value can the social objectives it pursues be sustainably achieved.
As a government-linked equity company, Ekuinas also has a social objective, which is to promote equitable and sustainable Bumiputera wealth creation and economic participation based on the principles of market-friendliness, merit and transparency via the creation of Malaysia’s next generation of leading companies.
Commercially driven – Creating sustainable value
- Financial target set as “hard/minimum” investment criteria
- Targets set in line with private equity benchmarks
- Recognise only through financial discipline can social objectives be achieved sustainably
To foster equitable Bumiputera economic participation across four dimensions
- Enhancing effective corporate equity ownership
- Growing the pool of qualified and experienced management
- Creating employment opportunities via growth in target sectors & companies
- Creating value for supply chain partners
Operating Model
Ekuinas’ operating model consists of all the important functions which form the foundation of the business. Key policies were developed with the aim of ensuring a private equity practice that is on par with global standards and best practices. These policies encompass the Company’s direct and outsourced investments, the respective frameworks and guidelines, as well as those established for other areas of business including governance, disclosure, treasury, human resources, stakeholder management and communications.
INVESTMENT PROCESS
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Direct
Investment -
Pipeline
Development -
Due
Diligence -
Structure/
Negotiate Deal -
Implement
& Monitor -
Exit
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Outsourced
Programme -
Identify Potential
Managers -
Due
Diligence -
Structure/
Guidelines -
Disburse
& Monitor -
Exit
Investment Focus
Ekuinas’ investment focus is on established growth companies that demonstrate strong track records and are looking to expand to the next stage.
In order to avoid overlapping of roles between Government agencies, Ekuinas does not focus on start-ups or early stage companies which are more suited for venture capital investments and instead focuses more on established growth companies.
Ekuinas is mandated to support medium to large-sized Malaysian companies which are in the GROWTH stage – typically such
companies would have some operational track record and are able to identify opportunities to expand to the next stage.
| BUSINESS LIFECYCLE | START-UPS & MICROENTERPRISES | DEVELOPMENT STAGE | GROWTH | LISTED / MATURE |
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| Existing Institutions Programmes | Examples of existing institutions and programmes include: | Examples of institutions include: | ||
Grants e.g.:
Equity & Loan:
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Equity & Debt:
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Target Sectors
Ekuinas may consider investments from all sectors, including Oil & Gas, Education, Fast Moving Consumer Goods (FMCG), Retail & Leisure including Food and Beverage (F&B), Healthcare and Services. These six (6) initial target sectors will continue to guide us in our investment strategy but we will also look at companies and industries that present good prospects and returns.
The Company will not, however, invest in gaming, liquor, or other illegal/unethical activities; hedge funds, derivatives or commodities; property and construction; and companies which do not contribute to the Malaysian economy.
NEGATIVE INVESTMENT LIST
- Gaming, Liquor, Illegal & Unethical Sector/Business
- Hedge Funds, Derivatives, Currencies, Commodities, Funds of Funds
- Property & Construction
- Businesses which are exposed to concentration risks especially those that rely heavily on a single source of revenue stream/customer
- Companies with no Malaysian focus
- No startups
Types of Investments
Ekuinas’ investment selection considers medium to large sized Malaysian companies in the following categories:
- TYPE 1
Growth capital investment in Malaysian companies to accelerate growth; - TYPE 2
Majority investment in strong Malaysian companies which demonstrate the potential to become market leaders; and - TYPE 3
Buy-outs of non-core assets of any government-linked companies (GLCs), public-listed companies (PLC), multi-national companies (MNCs) or Trust foundations.
Investment Framework
Ekuinas aims to identify all opportunities to invest in mid-sized Malaysian companies to transform and grow them into sizeable market leaders and profitable investments, after which Ekuinas will exit and apply the same process of value creation in other deserving companies.
Ekuinas undertakes its investments via two simultaneous operations:
DIRECT INVESTMENT
where Ekuinas directly undertakes investments and focuses on larger deal sizes. These normally involve controlling or sizeable equity stakes to enable active participation and value creation for the companies and all stakeholders.
OUTSOURCED PROGRAMME
where Ekuinas undertakes investments through third party private equity firms appointed as fund managers. The Outsourced Fund Managers (OFMs) are responsible to raise additional external capital and manage the investments.
To avoid overlap, each investment operation has a different focus.
EKUITI NASIONAL BERHAD |
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Direct Investment
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Outsourced Programme
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