Ekuinas eyes maiden investment in retail sector

KUALA LUMPUR: Ekuiti Nasional Bhd (Ekuinas) plans to make its maiden foray into the retail sector in three months, said Chief Executive Officer Syed Yasir Arafat Syed Abd Kadir.

“We are going to make it via a market leader in the country.

“Going forward, we are also keen to develop new industries and sectors, whereby there will be more investments in technology and healthcare,” he told a press conference after announcing Ekuinas’ performance for the financial year ended Dec 31, 2015 yesterday.

Considering the challenging economic climate, Ekuinas planned to be extra prudent with investments this year, said Syed Yasir Arafat.

He said the government-linked private equity fund management company was well-capitalised with its Tranche 3 Fund only 15 per cent utilised out of the RM1.5 billion.

Ekuinas’ current two major investments are in the oil and gas (40 per cent) and education sectors (26 per cent), he said, adding that these composition would likely change.

On outlook, Syed Yasir Arafat said while it remained tough, the situation had improved with more opportunities for deals to go through, considering the market have began to adjust to the new environment. “The overall weakness is still there. We just need to pick and choose winners,” he said.

Last year, the Ekuinas Direct (tranche 1) Fund recorded a gross portfolio return of RM591.3 million, gross annualised internal rate of return (IRR) of 14.8 per cent and a net annualised IRR of 10.9 per cent.

Its second fund, Ekuinas Direct (tranche 2) Fund posted gross portfolio return of RM133.3 million at a gross annualised IRR of 13 per cent and a net annualised IRR of 5.7 per cent.

Through its investment activities, Ekuinas increased the total Bumiputera equity value in its portfolio companies by RM3.7 billion or 1.6 times the total invested capital and an increase in total shareholders value of RM4.7 billion or 2.1 times the capital invested.

Investments undertaken in 2015 included maiden investments in the healthcare industry with a 60 per cent equity acquisition in MediExpess (Malaysia) Sdn Bhd and PMCare Sdn Bhd for a RM79.8 million.

Ekuinas also backed its education portfolio, ILMU Education Group and Orkim Sdn Bhd by providing additional capital of RM150 million and RM70 million, respectively.

Meanwhile, Ekuinas exited from the Quick Service Restaurant segment, namely divestment in Burger King and San Francisco Coffee last year to facilitate deeper focus on casual dining and desserts segments, which has the potential to generate healthy returns.

When asked on Ekuinas’ position on Icon Offshore, considering the volatile oil and gas industry, Ekuinas Chairman Tan Sri Arshad Raja Tun Uda said: “We have always emphasised that we believe in the business of Icon Offshore and we will continue to support them.” — Bernama