As Malaysia charts its economic path forward, Khazanah Nasional plays a significant role in the country’s investment landscape while adhering to its commitment to achieving long-term, sustainable returns. Its managing director Datuk Amirul Feisal Wan Zahir reflects on the past year’s record-breaking successes, the challenges and opportunities ahead, as well as how the fund’s “Advancing Malaysia” strategy will help define Malaysia’s future.

In 2024, Khazanah delivered its highest annual return, achieving a net asset value (NAV) time-weighted rate of return (TWRR) of 24.6%, a substantial increase from 5.7% in 2023. This performance earned Khazanah the recognition from Global SWF as one of the world’s top-performing sovereign wealth funds. The performance was largely driven by strong public market investments, particularly in Malaysian equities, which recorded a 34.3% TWRR.

“Our total portfolio size, or realisable asset value (RAV), expanded to RM151.3 billion, and we closed the year on a high note, recording RM5.1 billion in operating profit — further solidifying our strong financial position. This outstanding performance underscores Khazanah’s disciplined investment approach and strategic focus on value creation,” says Amirul Feisal.

“Other key factors included our portfolio rebalancing efforts, active monetisation strategy and stable dividend income. Our six-year rolling NAV total return stood at 6.5%, exceeding our long-term target of CPI (Consumer Price Index) plus 3%,” he adds.

Khazanah’s ability to generate consistent long-term value is evident in its disciplined investment approach, which ensures resilience even amid global uncertainties. This underlines its capacity to weather such uncertainties while maintaining a disciplined, value-driven approach. The fund also declared a RM1 billion dividend to the Malaysian government, pushing cumulative contributions since 2004 to RM19.1 billion.

Nevertheless, its private market investments faced some headwinds due to valuation lags, particularly in China, says Amirul Feisal. “However, we remain committed to our long-term strategy. We are refining our approach by strengthening fund manager partnerships and focusing on high-growth sectors such as semiconductor, artificial intelligence (AI) and sustainability-linked industries.”

The past year was not without hurdles. Global market volatility, geopolitical risks and inflationary pressures posed significant challenges, but Khazanah’s diversified investment strategy ensured stability amid economic turbulence.

“One key lesson is the importance of maintaining agility. By continuously monitoring market conditions and adjusting our strategies accordingly, we were able to take advantage of favourable opportunities while mitigating downside risks,” says Amirul Feisal.

This resilience stems from Khazanah’s ability to balance financial prudence with strategic investments, reinforcing its role as a steward of national economic growth.

At the heart of Khazanah’s investments is its Malaysia strategy anchored on “A Nation that Creates” (ANTC) framework which is designed to Advance Malaysia into the next phase of economic transformation. “The five key themes under the ANTC are Transforming Firms, Energy Transition, Connectivity, Digitalisation and Community Development which also supports the national agenda under the Ekonomi MADANI framework,” says Amirul Feisal.

To achieve its ambitious goals, Khazanah recognises that collaboration is vital. “The whole-of-nation approach is key to driving progress across Malaysia.

“We (Khazanah) understand that we can’t do everything on our own, and the same goes for all government-linked companies (GLCs),” he says.

“Our role as a catalyst and facilitator is to empower our portfolio companies to create value and boost their competitiveness, especially on a regional and global scale. A whole-of-nation approach means collective involvement and cooperation in transformation efforts.”

“Similarly, government-linked investment companies (GLICs) and government-owned entities play an important role in attracting or “crowding-in” private investors and other stakeholders to help develop Malaysia’s economy,” says Amirul Feisal.

“Collaboration with private companies, the government, regulators, fund managers, foundations, NGOs (non-governmental organisations) and academia is crucial for sparking more investments and economic growth,” he adds.

“Last year, we also launched Jelawang Capital, a Dana Impak initiative, as the National Funds-of-Funds to accelerate growth of Malaysia’s venture capital ecosystem. These efforts aim to stimulate innovation in the country and develop high potential sectors through supporting Malaysian emerging managers and partnering with reputable regional managers,” continues Amirul Feisal.

As Malaysia builds up its global competitiveness, Khazanah is balancing domestic priorities and the returns from its global portfolio, ensuring that they complement efforts to strengthen Malaysia’s economy and deliver benefits to the rakyat.

The international exposure in the portfolio provides diversification benefits in ensuring a resilient and sustainable portfolio that can mitigate downside risk as well as reap the benefits of global growth to fund its mandate over the long term.

Amirul Feisal says the benefits of these strategies are significant, as Khazanah’s international investments help strengthen economic resilience by acting as a buffer against local economic ups and downs, stabilising national income and shielding the fund from downturns.

“We place a strong emphasis on knowledge transfer and innovation. By partnering with global leaders, we exchange ideas and expertise, fostering a culture of innovation that propels our local industries forward and drives research and development,” he continues.

By balancing its domestic and international portfolios, Khazanah ensures that its investments support the broader mission of advancing Malaysia while safeguarding the country’s economic interests. “Our goal is to enhance Malaysia’s resilience, making sure we are prepared for future challenges while creating value for the nation,” says Amirul Feisal.

Beyond financial returns, Amirul Feisal says Khazanah’s mandate as a long-term investor extends to nation-building and economic resilience. This means ensuring that its investments not only generate profits but also contribute to Malaysia’s long-term prosperity.

Khazanah is 100%-owned by the government with a mission to advance Malaysia. Amirul Feisal points out, “Khazanah does not receive regular capital injections, and our returns are reinvested for growth.”

“We carry out our mission through a dual-mandate of investing to deliver sustainable returns for Malaysia and also to make strategic investments that have a developmental agenda.”

“This is no easy task. Most sovereign wealth funds globally pursue a single objective—typically focused solely on achieving commercial returns. Some funds are even restricted from investing in their own countries, in pursuit of commercial returns and risk diversification. However, an increasing number of nations are encouraging their funds to contribute to national development, much like Khazanah is doing for Malaysia.”

“An example of our efforts with a developmental agenda is the strengthening of the Malaysian semiconductor sector through catalytic partnerships and direct or co-investments,” says Amirul Feisal. “These initiatives align with key national policies such as the New Industrial Master Plan 2030, National Energy Transition Roadmap, GEAR-uP and the National Semiconductor Strategy.”

Ultimately, he says Khazanah is committed to investing for sustainable growth and returns. “We will adhere to our disciplined investment approach, supported by robust processes and a firm commitment to high governance standards — without compromise.”

Looking ahead, Khazanah’s 2025 investment strategy will focus on building resilience amid global uncertainties while accelerating Malaysia’s economic advancement.

Khazanah’s roadmap for 2025 builds upon the pillars of ANTC, prioritising strategic areas that will solidify Malaysia’s economic growth and future readiness.

This year, Amirul Feisal says the focus sharpens on fortifying the country’s business ecosystem, particularly by empowering high-growth firms, fuelling the green economy, enhancing national connectivity and fostering a robust digital landscape.

Equally vital is the commitment to societal value, ensuring investments translate into tangible benefits for communities, workforce development and long-term prosperity.

To support this, Khazanah is making strategic investments across high-impact sectors. Dana Impak’s investments in the Cambrian Fund supports the development of local entrepreneurs and SMEs in IR4.0 technologies, and the investment in Syntiant will boost R&D in AI and semiconductor technologies, while UEM Lestra’s RM1.5 billion commitment to renewable energy will accelerate industrial decarbonisation. In aviation, the privatisation of Malaysia Airports Holdings Bhd (MAHB) will enable significant investments in infrastructure upgrades, enhancing Malaysia’s global connectivity.

“Looking ahead, the macroeconomic outlook remains challenging. As a long-term investor, we will maintain a cautious investment approach, focusing on value creation within our portfolio companies by enhancing productivity, with the goal of driving higher valuations. Additionally, we will continue diversifying our portfolio to mitigate volatility.” concludes Amirul Feisal.

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