Malaysia’s Retirement Fund Inc’s (Kumpulan Wang Persaraan (Diperbadankan [KWAP]) has allocated MYR 500 million ($108.84 million) in 2023 to boost the country’s venture capital ecosystem.

KWAP said in a statement on Wednesday that aligned with the Malaysian government MADANI initiative to create new economic opportunities, the fund has committed to strengthening Malaysia’s venture capital ecosystem through the Dana Perintis initiative launched in 2023.

With a total of MYR 500 million allocation, it said this effort aims to accelerate growth within the Malaysian entrepreneurial landscape, empower early-stage companies, drive innovation, and enhance economic resilience.

Meanwhile, the fund has achieved a net income of MYR 9.7 billion ($2.11 billion) in 2023, a significant increase from MYR 263 million ($57.24 million) in 2022.

Further to this, the fund delivered a strong total fund investment return of 8.2 percent for the year.

For respective asset classes, KWAP’s public equity investments recorded a time weighted rate of return (TWRR) of 11 percent, private equity portfolio delivered a TWRR of 7.9 percent, fixed income portfolio achieved a TWRR of 6.2 percent, infrastructure portfolio attained a TWRR of 5.2 percent, and real estate obtained a TWRR of 3.5 percent.

The solid performance reflects the effectiveness of KWAP’s investment strategies and asset allocation decisions, said the firm.

In line with the government’s MADANI Economy agenda to spur domestic investments, KWAP has remained a key investor in Malaysia with a total of 75.6 percent of KWAP’s investment assets invested in Malaysia, while only 24.4 percent divested in international market.

From the total investment assets, public investment made up 87.7 percent or MYR 149 billion ($32.42 billion) and the remaining 12.3 percent or MYR 20.8 billion ($4.53 billion) in private market.

Additionally, with the announcement of various MADANI economic drivers, including the National Energy Transition Roadmap and New Industrial Master Plan 2030, KWAP has dedicated its efforts to thorough investment planning and strategy formulation to be inclusive in its approach to growing KWAP fund sustainably.

For the fiscal year 2023, the asset allocation (AA) of KWAP outlines a distribution encompassing 47.9 percent in public equity, 35.5 percent in fixed income, 5.3 percent in real estate, 4.8 percent in private equity, 2.1 percent in infrastructure, and the remaining 4.4 percent in money market.

The contributions amount received in 2023 of MYR 2.7 billion ($587 million) were from three main sources: federal government contributions, government shares, and employer contributions.

The latter included contributions from statutory bodies, local authorities, and secondment agencies.

For the financial year 2023, KWAP fund size also grew from MYR 158.1 billion ($34.4 billion) in 2022 to MYR 169.8 billion ($36.95 billion) in 2023, marking a 7.4 percent growth and keeping KWAP on track to achieve its TERAS 5 goals by the end of 2024.

After taking into account withdrawals totaling MYR 3 billion ($653 million) of KWAP fund used to partially finance the Government’s pension liabilities, the net increase of MYR 11.7 billion ($2.55 billion) year-on-year reflects the organization’s continued dedication to prudently manage assets and optimize investment returns to serve its mandate.

This reinforces KWAP’s position as Malaysia’s largest public sector retirement fund for civil servants, said the statement.

On retirement services, up until 31 December 2023, KWAP served 790,772 pension recipients throughout Malaysia with a breakdown of 73 percent of pensioners and 27 percent of derivative recipients.

This represents a 2.8 percent increase, or 21,825 additional pension recipients, compared to the year 2022.

Despite the increase of pension recipients in 2023, service-level agreement (SLA) performance for pension services achieved an annual weighted score of 99.4 percent in 2023, surpassing the performance threshold of 95 percent as set in the SLA with Public Service Department (JPA).

In addition to its financial and operational accomplishments in 2023, KWAP said it remained resolute in its unwavering dedication to effecting positive change beyond its investment activities.

“KWAP’s notable performance in 2023 builds on our strong track record in meeting both our financial and social objectives,

“These results validate the effectiveness of our investment model to generate sustainable returns for our stakeholders,” said Hajah Nik Amlizan Mohamed, Chief Executive Officer of KWAP.

According to him, the firm is also structuring its investment effort and initiatives around MADANI framework, and this approach allows the fund to deliver positive returns for its beneficiaries while contributing to Malaysia’s sustainable development.

“Our continued success affirms KWAP’s financial strength and demonstrates our commitment in creating long-term value for our pensioners and the country as a whole,” he noted.

With clear purpose and determination, he said the fund persistently elevate its effort to enhance the retirement experience for its pensioners by introducing a diverse array of meticulously curated initiatives and activities tailored to their needs.

Although pension reform has been discussed albeit at its nascent stage of implementation, he said it presents a new dynamic within the national context and pension ecosystem.

“We at KWAP will play our role to efficiently and effectively ensure that our pension system remains robust and responsive to the evolving needs of our pensioners,

“We will remain steadfast in our commitment to fostering a more fulfilling retirement journey for Malaysian pensioners,” he added.

Established in 2007, KWAP manages contributions from the Malaysian government and relevant agencies made into the retirement fund to obtain optimum returns on its investments through sound management and investment of the fund in equity, fixed income securities, money market instruments, and other forms of investments.

The fund will be applied towards assisting the the Malaysian government in funding its pension duties.

In 2015, KWAP was officially appointed as an agent of the Malaysian government for the purpose of payment of pension, gratuity, and other benefits granted under any written law from the consolidated fund as agreed between the government and KWAP.

Malaysia’s KWAP invests $21M in Bateriku, Lapasar, Vynn Capital and Antler