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Malaysia’s $480m co-investment allocation to go to GLICs, says finance minister | #VentureCanvas

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Ka Kay Lum | DealStreetAsia – VC

Malaysia will make an up to RM2 billion ($480 million) co-investment allocation announced in its budget earlier to government-linked investment companies (GLICs) such as sovereign wealth fund Khazanah Nasional, finance minister Lim Guan Eng said on Wednesday.

In its budget announcement, the government had said its co-investment allocation will be invested alongside PE and VC players in strategic sectors and new growth areas.

“We will be matching the funding amount, from 1 to 1 or 1 to 2 or 1 to 4, for example, RM1 from the government and RM4 from the private fund, depending on the venture,” he said during his keynote address at the Securities Commission (SC) Malaysia’s SCxSC Fintech Conference 2018.

The same mechanism will also apply for the RM50 million ($12 million) co-investment fund (CIF) that seeks to partner with the private sector through alternative financing platforms such as equity crowdfunding (ECF) and peer-to-peer (P2P) platforms, as announced in the Budget 2019 by Lim on November 2.

“The CIF will operate under a commercial mandate toward eventually becoming self-sustaining through its investment returns, with earnings channelled back to finance more ECF and P2P campaigns. If successful, the CIF would be self-replenishing and will not be reliant on new funds from the government in the future, thereby helping alleviate some of our fiscal burden… The final details of the fund are being worked out by the SC and the CIF should be operationalised by early next year,” said Lim.

According to SC Malaysia chairman Syed Zaid Albar, the ECF and P2P platforms in Malaysia have collectively raised more than RM200 million for almost 500 MSMEs across various sectors and have also attracted a new demographic of investors, particularly those aged 35 years and below.

“To build on this success and scale up the segment, the SC will assess new applicants who are interested in operating ECF and P2P financing platforms. We will provide the public with more details in an announcement in the first half of 2019,” he said.

In his budget speech on November 2, Lim had also said all state-linked VC funds – Malaysia Technology Development Corporation, Malaysia Debt Ventures Bhd, Malaysia Venture Capital Management Bhd (MAVCAP) and Cradle Fund Sdn Bhd – would be streamlined and made more efficient in delivering capital to companies in various stages of financing needs.

However, he declined to elaborate on the “streamlining” operation when asked if it would involve any reshuffling or shutdown of any of these state-linked VC funds.

On the upcoming guidelines and regulatory framework to approve and monitor digital asset and token exchanges, Lim maintained that the regulatory framework would be made available in the first quarter of 2019.

Commenting on the recently launched P2P property crowdfunding platform FundMyHome by The Edge Property, SC Malaysia’s Syed said that the regulator has completed the first cut of the draft to regulate the platforms and will officially roll out the framework by the first quarter of 2019 as well.

Currently, the P2P property crowdfunding platform is only open to financial institutions to fund property purchases and is yet to be opened to retail investors or the general public. The launch of FundMyHome had raised eyebrows as the platform was unveiled two days right after the Malaysia budget presentation.

“We are targeting the regulatory framework for property crowdfunding to be out by 1Q2019 so we are in the process of amending the guidelines to make sure that we accommodate the concept. First cut is ready, with this draft we will engage with the industry to get everyone’s view. We’re looking at everything from the guideline’s point of view, to ensure that investors are protected – that’s our prime concern. The investors are the housebuyers,” he said.

SC Malaysia’s executive director of innovation, digital and strategy, Chin Wei Min, said that everyone is eligible to apply to be a P2P property crowdfunding platform operator, provided they meet the guidelines and requirements.

Also read:

Budget 2019: Malaysia to set up $480m co-investment fund targeting new growth areas

Malaysia: The Edge Property launches P2P crowdfunding platform FundMyHome

The post Malaysia’s $480m co-investment allocation to go to GLICs, says finance minister appeared first on DealStreetAsia.

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Source: Malaysia’s $480m co-investment allocation to go to GLICs, says finance minister

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