Sep 22, 2016

    Malaysian pension fund taking a bet on Uber?


    MALAYSIA'S US$30 billion (S$41 billion) pension fund, Kumpulan Wang Persaraan (Kwap), is looking to pump in more money into technology firms, following its recent foray into the sector with an investment in what sources have identified as ride-sharing service Uber.

    Kwap, Malaysia's second biggest pension fund, is diversifying into new sectors at a time when returns across its investments have slowed.

    The pension fund has committed to a US$30 million investment in its "first disruptive technology deal" in a foreign firm, chief executive Wan Kamaruzaman Wan Ahmad told Reuters in an interview.

    "This is our first investment in this space, and we want to continue building our expertise in this area," he added.

    While he did not reveal the name of the firm, two sources close to the deal said Kwap had recently invested the amount in Uber Technologies.

    The sources did not want to be named as the deal was still under wraps.

    A financing round earlier this year valued Uber at US$62.5 billion. The United States firm has been operating in Malaysia since 2013.

    Like Kwap, other Malaysian government-linked funds have also been pumping more into technology assets, such as Khazanah that has put money in Alibaba, Skyscanner and WeLab.

    Kwap posted a return of 5.4 per cent last year, lower than a targeted 6 per cent.

    Around 90 per cent of its investments are in traditional assets, such as fixed income and equity. The remaining 10 per cent goes to alternative investments, such as private equity, but the CEO said the fund may increase that allocation to 15 per cent.

    He also sees opportunities in Britain where a Brexit vote has weakened the sterling and dented asset prices.