KUALA LUMPUR (Oct 28): Khazanah Nasional Bhd has launched Jelawang Capital Sdn Bhd, a national funds-of-funds initiative aimed at bolstering Malaysia’s venture capital (VC) ecosystem, following its acquisition of Malaysia Venture Capital Management and Penjana Kapital in July of this year.

"Jelawang Capital signifies our commitment to the growth of Malaysia’s venture capital (VC) ecosystem. Through this catalytic initiative, Jelawang Capital will continue to grow Malaysian fund managers while crowding-in regional fund managers with expertise and capital,” said Khazanah managing director Datuk Amirul Feisal Wan Zahir in a statement on Monday.

He said the VC industry is an important source of innovation, economic growth and job creation for the nation but only 1.5% of startups in the top US VC hubs enjoy meaningful financial returns on their investments — that is, a successful exit of US$50 million (RM216.88 million) or more — citing a research by Startup Genome. This illustrates the high inherent risks and challenges associated with this asset class, he said.

“As such, nothing short of an all-of-nation approach will be needed for us to increase the odds of success. While capital is a key building block to a vibrant venture capital ecosystem, other critical success factors include the ease of doing business, availability of talent, and deepening of technology and know-how. As innovation is borderless, it is this combination of capital, effective regulation, talent and technology that will determine the future of Malaysia,” he said.

To accelerate the growth of Malaysia’s VC ecosystem, Jelawang Capital will lead two key initiatives. The first is the Emerging Fund Managers’ Programme (EMP), designed to nurture promising Malaysian venture capital fund managers as they raise their first, second, or third funds.

Open to Malaysian General Partners (GPs), whether based in Malaysia or abroad, the EMP is designed to help these fund managers build their track records and enhance their competitiveness within the VC landscape.

“Jelawang Capital will act as an anchor for Malaysian general partners to gain traction and crowd-in further capital from other local or international investors. Aside from capital support, the EMP aspires to support general partners to develop crucial areas such as fund management, investment operations and talent management. In turn, this is expected to gradually institutionalise and improve the capabilities of general partners,” said Khazanah.

The second initiative, the Regional Managers' Initiative (RMI), aims to enhance Malaysia’s startup ecosystem through strategic partnerships with regional venture capital firms.

This initiative focuses on supporting the growth of Malaysian startups to become regional and global players while also facilitating the redomiciling of global companies in Malaysia to expand local job capabilities, attract talent and deepen innovation.

“In addition, Jelawang Capital welcomes established venture generators to unearth new entrepreneurs and support the growth of existing ones in Malaysia. Regional managers aligned with these strategic objectives,” the statement read.

The national fund-of-funds will be led by its chief executive officer Bryan Lim, who is also Khazanah's head of Dana Impak or Impact Fund. 

Jelawang Capital itself will also be a part of Dana Impak, a key pillar of Khazanah’s Advancing Malaysia strategy, which seeks to enhance the nation's productivity and competitiveness by focusing investments into areas that will deliver the best socio-economic benefits and impact to Malaysians.