"With the current market volatility and 'post-covid' uncertainty, we (Crewstone International) would like to restore investor confidence by providing a safer passage for the inflow of foreign investment through a licensed fund with minimal risks. The fund seeks to invest in Malaysian companies with a clear exit strategy in the short run for capital gains." said Ahmad Izmir Mujab, Chief Executive Officer of Crewstone International Sdn Bhd.

Crewstone International Sdn Bhd (Malaysia), a regional private equity firm based in Kuala Lumpur, is targeting to raise an initial investment of over RM 500 million in 2021 for a series of funds regulated by Securities Commission Malaysia, that will invest in various late stage companies in Malaysia. Datuk Wira Jalilah Baba, Chairperson of Crewstone International also said "additionally, foreign investors will be given an opportunity to expand the reach of their investee companies through the partnership with local industry players. We are taking an investment promotion agency approach to this exercise," highlighting her experience as a former Director General of Malaysian Investment Development Authority, (MIDA).

The strategy aims to capitalize on the growth potential of the Malaysian market through a series of co-investments by specifically, regional private equity funds, and other institutional investors. The target investment will be disbursed in the form of bridging finance for companies to secure Series C and above or pre-IPO (initial public offering) into Bursa Malaysia.

The strategy has gained interest from a number of investors in the region. One such investor David Whitaker, Managing Director of Key Idea Capital (Australia), said "We are confident that the partnership synergy between Key Idea Capital and Crewstone International will open up the number of deal flow and co investment opportunities into Malaysian and Australian companies looking to expand in the ASEAN territory. We are working closely with Crewstone to evaluate these opportunities." Key Idea Capital Pty Ltd assists companies in sourcing and providing growth and project capital to drive the global commercialisation of product and services across multiple sectors. These include (but are not limited to); technology, automotive, pharmaceutical, equipment leasing, digital and holographic production and sports technology.

Key Idea Capital has been an early investor and supporter of companies such as Imagine Room Pty Ltd who are leading the charge in the development and deployment of holographic performance capture in Australia and the region. Other investee companies include specialists in sports campaign and fan engagement such as Benchvote, Fankave, and Enrams who focus on delivering an energy product. "We see that the substantial opportunity working with Crewstone will bring both regions enormous benefit through the access to capital for companies and the mutual knowledge transfer that will result. Key Idea Capital and its regional partners are ideally situated to ensure that many companies benefit from this new partnership." said Key Idea Capital.

Malaysia's net foreign direct investment fell 56% to US$3.4 billion in 2020, a government report said on Tuesday, as the Covid-19 pandemic hit economic activity globally and in the trade-reliant Southeast Asian nation.

Net foreign investment totalled RM13.9 billion in 2020, down from RM31.7 billion the previous year, according to a report published by the Malaysian Investment Development Authority (MIDA).

As a result there are a number of policies announced by the government that are expected to have a positive impact on foreign investment activities.

These include, as a response to the economic downturn, a number of stimulus packages including a series of 40 short-term economic recovery measures (collectively called PENJANA, Pelan Jana Semula Ekonomi Negara) with a total of RM35 billion (~US$8.2 billion) in value. Some of these initiatives are either aimed at FDI or will have an impact on FDI in Malaysia.

Crewstone International is one of the VC (venture capital) fund managers selected under the The Dana Penjana Nasional (DPN) programme through Penjana Kapital Sdn Bhd to raise funds from foreign investors into Malaysia.

The Malaysian government will match up to RM600mil, on a one-to-one basis, for funds raised by the VC fund managers from foreign and private local investors, with a target allocation of RM1.2bil.

The government said the selected VC fund managers have indicated additional investments to achieve a maximum fund size of RM1.57bil, or RM370mil above the original allocation of RM1.2bil.

The Dana Penjana Nasional (DPN) programme through Penjana Kapital Sdn Bhd will be the boost for Malaysian startups at the time of the new normal, says Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

DPN is a matching fund-of-fund programme, which is part of the short-term economic recovery plan (Penjana) that was launched by the government earlier in June 2020.

“These eight VCs were carefully selected among the 51 applicants from around the world, including the US, China, Indonesia and Singapore, ” Tengku Zafrul said.

Ahmad Izmir Mujab, CEO, Crewstone International Sdn Bhd - Putrajaya

Speaking to The Edge Malaysia, Crewstone International’s Chief Executive Officer, Ahmad Izmir Mujab says “I am confident that we can identify some amazing deals in the region for our partners and investors in the joint fund with Penjana Kapital Sdn Bhd. At the same time, we have the responsibility to the Malaysian government and the people of Malaysia to invest in projects that would benefit Malaysia and contribute to the country’s economic development especially in the times of ‘the new normal’.”

“Our founders and team members have extensive experience in the industry, many of which have worked for some of the most reputable companies in the financial services sector. Our team consists of seasoned entrepreneurs, analysts, fund managers and former high ranking government agency officials."

Crewstone International is a Private Equity & Venture Capital firm based in Kuala Lumpur, Malaysia. Crewstone aims to acquire financial equity positions in emerging markets primarily in the ASEAN Region with the potential for public listing.

  • Izmir Mujab

As a result of the impact of the triple Black Swan events, there is a possibility that Malaysia will be experiencing a recession in 2020 with an estimated base case growth at -0.5% by World Bank, with Maybank Kim Eng projecting a -3.5% growth. However, no downturn will last for long. The deeper the drop in economic growth, the bigger the jump towards recovery.

A recent study by the International Strategy Institute, shared that a 2.9% contraction in GDP could result in an unemployment of 2.4 Million Malaysians, which is roughly 10% of the workforce.

There does not seem to be a strategy by the government on job creation, a high level of consumer debt, and adding to this, the resulting supply shock impact of the just ended oil crisis will adversely impact the government’s oil revenue. As a trading and exporting nation, Malaysia would not be immune to the drop in imports of non essential goods from major trading partners.

Many economists and analysts are projecting that Malaysia and the global economy will likely have a wider “U” shaped recovery, which, based on stimulus packages announced by major economies and progressively announced by the Perikatan Nasional Government, allows for a possible avoidance of an “L” shaped recovery.

Nonetheless, with major economies at different stages of control of the pandemic, it will take longer than expected for an economic reboot to take place. This along with an optimistic vaccine cure in 18 to 24 months time, with a curtailed credit ability of consumers will possibly skew the recovery curve towards an “L” shape scenario.

- Article by Izmir Mujab & Remakantan Nair

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