Malaysia’s sovereign wealth fund Khazanah Nasional Berhad has launched the national fund-of-funds, Jelawang Capital Sdn Bhd, to accelerate growth of Malaysia’s venture capital ecosystem.

The firm said in a statement on Monday that the move is following the consolidation of Malaysia Venture Capital Management and Penjana Kapital in July.

“Jelawang Capital signifies our commitment to the growth of Malaysia’s venture capital ecosystem,

“Through this catalytic initiative, Jelawang Capital will continue to grow Malaysian fund managers while crowding-in regional fund managers with expertise and capital,” said Amirul Feisal Wan Zahir, Khazanah Managing Director.

He added the venture capital industry is an important source of innovation, economic growth and job creation for the nation.

However, based on research by Startup Genome, he noted only 1.5 percent of startups in the best US VC hubs enjoy meaningful financial returns on their investment i.e. a successful exit of $50million or more.

He opined that this is illustrating the high inherent risk and challenges associated with this asset class.

“As such, nothing short of an all-of-nation approach will be needed for us to increase the odds of success,” he said.

While capital is a key building block to a vibrant venture capital ecosystem, he noted other critical success factors include the ease of doing business, availability of talent, and deepening of technology and know-how.

“As innovation is borderless, it is this combination of capital, effective regulation, talent and technology that will determine the future of Malaysia,” he added.

Jelawang Capital will be led by Bryan Lim as its Chief Executive Officer, who is also Khazanah’s Head of Dana Impak.

“Our vision for the local venture capital ecosystem begins with the provision of capital to fund managers,

“In turn, we envision this capital and expertise of the managers to cascade to high-potential startups,” said Bryan Lim.

He also hopes these high-potential investments will enrich the wider venture capital ecosystem in Malaysia with innovation and quality jobs.

To accelerate the growth of Malaysia’s venture capital ecosystem, Jelawang Capital will spearhead two initiatives:
the Emerging Fund Managers’ Program (EMP) and the Regional Managers’ Initiative (RMI).

The EMP aims to nurture promising Malaysian venture capital fund managers to raise their first, second or third fund.

Open to Malaysian general partners based in Malaysia or abroad, the EMP seeks to support Malaysian fund managers to establish their track record and increase their competitiveness in the venture capital ecosystem.

Jelawang Capital will act as an anchor for Malaysian general partners to gain traction and crowd-in further capital from other local or international investors.

Aside from capital support, the EMP aspires to support general partners to develop crucial areas such as fund management, investment operations and talent management.

In turn, this is expected to gradually institutionalize and improve the capabilities of general partners.

RMI, on the other hand, aims to elevate Malaysia’s startup ecosystem through strategic partnerships with regional venture capital firms.

The RMI represents Jelawang Capital’s effort to attract international fund managers who are committed to enrich the ecosystem.

This includes supporting the growth of Malaysian startups to be regional and global players, as well as facilitating the redomiciling of global companies in Malaysia to expand local job capabilities, attract talent and deepen innovation.

In addition, Jelawang Capital welcomes established venture generators to unearth new entrepreneurs and support the growth of existing ones in Malaysia.

Both the EMP and RMI initiatives will enable the fusion of local and international expertise, perspectives and knowledge to spur a vibrant ecosystem that fuels progress that advances Malaysia.

As the national fund-of-funds, Jelawang Capital forms part of Dana Impak.

Dana Impak is a key pillar of Khazanah’s Advancing Malaysia strategy anchored by ‘A Nation that Creates’ framework which aims to boost national productivity and competitiveness.

Dana Impak initiatives aim to empower Malaysian business of all sizes and across different life cycles, including startups, small to mid-tier as well as large companies, with the objective of improving livelihood of communities.

Khazanah Nasional to launch initiatives to advance Malaysia’s venture capital ecosystem