HomeBusinessEconomyVenture Capital, Equity Investment Committed RM16.08b In 2022

Venture Capital, Equity Investment Committed RM16.08b In 2022

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According to the Securities Commission, the private equity and venture capital industries raised RM16.08 billion in combined funds in 2022, up from RM14.83 billion in 2021. (SC).

The private equity and venture capital industries had total committed funds under management of RM10.71 billion and RM5.37 billion, respectively, at the end of 2022, according to the SC’s Annual Report 2022, which was released today.

Meanwhile, private equity had a committed fund of RM9.65 billion in 2021, while venture capital had a fund of RM5.18 billion.

“In the case of private equity, commitments are primarily sourced from corporate investors (33.40%), individuals and family offices (16.97%), and financial institutions.” (12.78 per cent).

“Government agencies and investment companies (36.01%), sovereign wealth funds (27.27%), and corporate investors (22.68%) are the top three sources of funding for venture capital,” the SC stated.

It went on to say that Creador, Xeraya Capital Sdn Bhd, and Malaysia Venture Capital Management Bhd were the top three registered corporations in terms of investor commitments as of the end of 2022. (Mavcap).

In 2022, venture capital investments will be focused on expansion (48.18%), followed by early stage (36.53%), and seed prospects. (10.54 per cent).

Securities Commission Malaysia Headquarters in Kuala Lumpur. (Image by: Securities Commission)

Private equity investments were predominantly directed towards growth plays (64.87%), with some directed towards early-stage opportunities (28.20%), followed by bridge, mezzanine, and pre-initial public offering (IPO) investments. (6.85 per cent).

“In total, 34 venture capital and 38 private equity transactions were recorded in 2022,” the report stated.

In terms of target industries, medical and biotechnology (34.83%) received the most venture capital investment in 2022, followed by information and communications (16.45%) and financial and insurance/takaful activities (16.45%). (12.70 per cent)

In terms of private equity, investments in 2022 were primarily directed towards wholesale and retail trade (53.66%), followed by healthcare (13.45%) and manufacturing. (13.41 per cent).

The SC stated that divestiture activity in private equity portfolios during 2022 was primarily exits in the growth stage, but the majority of divestments in venture capital were early-stage positions, followed by growth.

While trade sales and secondary sales remain popular methods of obtaining liquidity, few IPOs were completed in 2022.

As of December 31, 2022, the total number of registered corporations in the industry was 129.

In the meantime, the venture capital segment had 109 registered corporations (venture capital management corporation and venture capital corporation), while the private equity segment had 20 registered corporations (private equity management corporation (PEMC) and private equity corporation).

As of the end of 2022, the industry employed 229 professionals with at least four years of experience.

Info source – Malay Mail

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