Exclusive | Why sovereign wealth funds are pouring billions into tech firms
Asia’s sovereign wealth funds like Malaysia’s Khazanah Nasional Bhd have been increasingly buying into more tech firms, mirroring the global trend
Today, Malaysia’s Khazanah Nasional is among the most active sovereign wealth funds in the world when it comes to technology investments, together with funds such as Singapore’s GIC, Temasek Holdings and China Investment Corp (CIC). It’s a big turnaround from just 10 years ago, when close to 90 per cent of Khazanah’s holdings and investments were in Malaysian companies.
Khazanah, which means “treasure” in Malay, only made its first big direct technology investment in China’s Alibaba Group in 2012. According to Khazanah managing director Tan Sri Azman Mokhtar, the fund’s discovery of the Chinese e-commerce giant was by chance, and came only after getting a drubbing on an investment in an Alibaba competitor.
“Some years back, we had made a very good investment in a brick-and-mortar retail company, Parkson – we had 10 per cent in this [department store operator] and we made fantastic returns,” Azman says.
“Then suddenly, the returns dropped off the cliff. I asked my people what was happening. Turns out, we were getting killed by this company we had never head of at the time called Alibaba. People were going online [to shop] and everything moved so fast.”
In 2008, Khazanah Nasional sold off its Parkson Retail Group Stake and later invested over US$400 million (HK$3.11 billion) in Alibaba in 2012 and 2013, ahead of the Chinese company’s initial public offering in 2014.
