Malaysia's venture capital industry poised to bounce back

Malaysian Venture Capital and Private Equity Association (MVCA) chairman Darawati Hussain gave the positive outlook based on the increasing level of confidence among investors, particularly from the Middle East, the US and Europe, on the economic environment from 2013 onwards.

“Our private investors who have been stagnant in terms of outsourcing funds due to the global economic crisis are now looking again at this part of the world,” she told reporters on Monday after the opening of the 4th Islamic Venture Capital and Private Equity Conference 2012 by Minister in the Prime Ministerial Department Nor Mohamed Yakcop.

The 5.4 billion-ringgit of assets under management are from the 28 members of the MVCA. About 1 billion ringgit of the total amount is Islamic venture capital. Currently, about two-thirds of the 5.4 billion ringgit has been invested.

On the declining trend, Darawati said that it was due to the sliding trend of funds being outsourced by the private sector due to the global economic crisis.

Total assets under management had slid to 5.4 billion ringgit currently from 5.9 billion ringgit ($1.89 billion). But, she said that funds from the government were increasing during these difficult times.

The largest fund in the venture capital industry still comes from the government, which commands 54 per cent of the total fund.

Meanwhile, Malaysia Venture Capital Management CEO Jamaludin Bujang said that it was working on a programme to raise money from its counterparts in the US, Europe and Asia.

“This programme is looking at matching contributions from us and our counterparts, and if all goes well in the next few months, we should be able to bring in about $100 million [Bt3.1 billion] this year,” he said.

Meanwhile, Nor Mohamed said there was a need to increase the number of venture capital funds in Malaysia, which currently stands at eight.

“Undoubtedly, we need to grow not only in the number of funds but also companies that have the potential to be multinationals, too.

“It is time we created companies with innovative technology that the Muslim world can be proud of.

 

Hard-disk makers see turnaround

Hard disk drive (HDD) component manufacturers in Malaysia expect a healthy year for the industry in 2012, after it was badly hit late last year by floods in Thailand.

Penang-based HDD component manufacturer Eng Teknologi Holdings Bhd expects to regain its world market share by the year-end or in early 2013. Group chief executive officer Datuk YK Teh said the group had to date injected approximately 100 million ringgit (about Bt1 billion) to rebuild production capacity for its manufacturing plants in Thailand, China, the Philippines and Johor, in view of the flooding in Thailand late last year.

Eng Teknologi produces HDD components such as base plates, separators and actuators for the HDD industry.

“With the funds pumped in, we expect to regain our worldwide market share, estimated to be 10 per cent.

“We also expect to perform better in the first quarter of 2012, compared with the final quarter of 2011, he said.