KUALA LUMPUR (July 30): Sovereign wealth fund Khazanah Nasional Bhd said on Tuesday it has completed the acquisition of Malaysia Venture Capital Management (Mavcap) and Penjana Kapital.

Both are now wholly owned subsidiaries of Khazanah, the company said in a statement. Khazanah will begin to set up a so-called national fund-of-funds with an initial allocation of RM1 billion to invest in innovative and high-growth startups via venture capital (VC) and private equity funds, it noted.

The integration of Mavcap and Penjana Kapital, both state-owned VC funds, would further strengthen Malaysia’s VC ecosystem, said Khazanah managing director Datuk Amirul Feisal Wan Zahir.

"By consolidating investment platforms across multiple investment agencies, Malaysia will be better positioned to ensure greater sustainability of funding, crowd-in private capital, attract regional VC firms into the country and catalyse strategically important sectors," he said.

Mavcap, set up in 2001, is Malaysia’s largest VC investor with more than RM2 billion in fund size, and it invested in more than 1,000 companies, according to its website. Penjana Kapital, meanwhile, was launched in July 2020 to provide matching funds to private capital, and it invests across all funding stages.

The establishment of a national fund-of-funds is in line with Khazanah’s Future Malaysia Programme, which aims to support the local start-up ecosystem of entrepreneurs, start-ups, VC, and corporate venture programmes through collaboration with domestic and international partners.

Khazanah said it is confident that the combined experience and resources of all the entities will enhance access to capital for start-ups, driving innovation and spurring economic growth.

This initiative is also a key pillar of Malaysia’s vision of becoming a preferred regional VC hub by 2030, as outlined in the Malaysia Venture Capital Roadmap 2024-2030 and the KL20 Action Paper.

“Their vision and dedication to the VC ecosystem all these years have been instrumental, and we look forward to drawing on the teams’ strength and experience to achieve our collective vision of Advancing Malaysia,” Amirul Feisal added.