Ekuiti Nasional Berhad (Ekuinas), the government-linked private equity fund management company, announced the results of its financial year ended 31 December 2021 (FY2021). In terms of direct investments, the Ekuinas Direct (Tranche II) Fund recorded strong growth with a Gross Portfolio Return of RM654 million, generating a Gross Internal Rate of Return (IRR) of 12.1% p.a. and a net IRR of 8.6%, marking a significant increase from last year which saw the Fund recording a Gross Portfolio Return of RM571.2 million.
Meanwhile, Ekuinas Direct (Tranche III) Fund recorded a Gross Portfolio Loss of RM125.3 million, translating to a negative Gross IRR of -4.3% p.a. The Ekuinas Direct (Tranche IV) Fund is still in the early stages of investment and is expected to perform well backed by the strong performance of its underlying asset, Medispec (M) Sdn Bhd, a leading distributor and marketer of local pharmaceutical and supplement products. This investment which was made in February 2021 signified Ekuinas’ maiden foray into the pharmaceutical space.
In relation to outsourced investments, the Ekuinas Outsourced (Tranche I) recorded Gross Portfolio Return of RM60.5 million, achieving a Gross IRR of 3.3% p.a. and a net IRR of 2.5% p.a. whilst Ekuinas Outsourced (Tranche II) Fund recorded a Gross Portfolio Loss of RM4.4 million, translating to a negative Gross IRR of -0.8% p.a.
For the year under review, Ekuinas recorded consolidated revenue growth of 12.1% and earnings before interest, tax depreciation, and amortization (EBITDA) growth of 28%, well above FY2020’s performance of -12.8% and -14.9% respectively.
Raja Tan Sri Dato’ Seri Arshad Raja Tun Uda, Chairman of Ekuinas said, “Whilst 2021 tested Ekuinas’ resilience as a company and as a PE investor given the uncertain and challenging economic environment brought on by the pandemic and resulting lockdowns, Ekuinas remained active in efforts to preserve our portfolio performance in a volatile environment and create long term value for our investors, companies, people and the wider community.”
“Apart from economic objectives, achieving social objectives is equally key to delivering on our mandate. In FY2021, Ekuinas successfully increased the total Bumiputera equity ownership in our portfolio companies to RM5.9 billion, or 1.5 times of capital invested, as compared to RM5.6 billion in 2020. We also helped to increase the pool of Bumiputera managers and employees by 19.4% for Bumiputera managers and 12.3% for Bumiputera employees, up from 13.3% and 10.5% respectively in 2020. These have contributed towards increasing the Total Shareholders’ Value for portfolio companies to RM7.7 billion, or 2.0 times of the invested capital as compared to RM7.0 billion in the previous year, reflecting Ekuinas’ success in leveraging on the PE business model to promote wealth creation for Bumiputeras and all Malaysians,” added Raja Tan Sri Dato’ Seri Arshad.
Syed Yasir Arafat, the Chief Executive Officer of Ekuinas who presented detailed results of FY2021 said, The PE market’s performance in Malaysia was relatively subdued despite growth in funds and asset allocation with the pandemic situation mid-2021 delaying broad-based recovery in economic activity. However, with the steady and gradual rebound that we see, we are ready to capitalise on opportunities that are aligned to our investment strategies.”
“Our investment strategy has always been for the long term. A volatile market masks true value of companies hence we made a conscious decision to keep our cash reserves intact in spite of the healthy investment pipeline.
Ekuinas also executed cost management measures for Al-Ikhsan Sports Sdn Bhd, Revenue Valley Group and Icon Offshore Bhd and drove significant organic and inorganic growth for Exabytes Capital Group and Flexi Versa Group.
As of FY2021, Ekuinas’ total cumulative investment stood at RM4.4 billion which comprised 70 investments covering 47 direct investments and 23 outsourced programmes which consequently generated a total economic deployment of RM5.0 billion, together with private sector partners.
On the Corporate Social Responsibility (CSR) front, Ekuinas through ILTIZAM, its CSR arm, continued to assist underserved communities across three pillars – Entrepreneurship, Education, and Community.
Commenting on the outlook for 2022, Syed Yasir said, “Ekuinas expects 2022 to be the year we truly emerge from the pandemic. We anticipate that economic activity will improve for many of our portfolio companies as the economy bounces back gradually and the country opens its borders.
