In bold move KWAP invests RM124mil in Uber, a non-traditonal asset

KWAP CEO Wan Kamaruzaman Wan Ahmad

KUALA LUMPUR: Taking the cue from Khazanah Nasional Bhd’s investment in tech start-ups, the country’s second-largest pension fund, Retirement Fund Inc (KWAP), has invested in car-hailing app Uber.

It is believed that the investment by KWAP in the tech start-up is about US$30mil (RM124.2mil) in the recent G series fundraising round that started last year.

The investment marked a bold step by KWAP to invest in a non-traditional asset, as the low interest rate environment is expected to prevail.

“Technology is one of the sectors that we would like to explore,” said KWAP chief executive officer Datuk Wan Kamaruzaman Wan Ahmad to reporters at the Private Equity Forum 2016 recently.

When asked about Uber, Wan Kamaruzaman said the fund had recently invested in a tech company and would make the announcement in due course.

KWAP is managing RM123bil in funds to date and is currently reviewing its fund portfolio to take on riskier investments, including doubling up its investment allocation in private equity (PE).

Wan Kamaruzaman said that around 90% of KWAP’s investments are in traditional assets such as fixed income and equity.

The remaining 10% is in “alternative investments” such as PE, property and infrastructure.

KWAP is joining other conservative portfolio managers worldwide in embracing bigger risks to bolster its performance in the current challenging market conditions.

Wan Kamaruzaman had earlier told StarBiz that the fund was beefing up its team to look at potential investments in the tech space.

Among the other investors that have been reported to be in Uber’s recent fund-raising exercise include the Saudi Arabia-based sovereign wealth fund Public Investment Fund, which pumped in US$3.5bil.

Uber is touted as one of the most funded start-ups in the world and is in the midst of expanding its operations in more than 70 countries worldwide.

Uber has gone through a total of nine rounds of funding worth US$12.9bil since its launch.

According to Seeking Alpha, Uber has US$13bil in cash and available credit and has raised money at a staggering valuation of US$68bil.

It has also lost at least US$1.2bil in the first half of 2016.

Uber has also grown into 400 cities in 72 countries. It started its operations in Malaysia in late 2013.

Khazanah was reported to have an indirect investment in Uber via a private equity fund..

It is understood that Khazanah has invested hundreds of millions in start-ups such as San Mateo’s Fractal Analytics, a data analysis firm, and Garena, one of South-East Asia’s largest gaming platforms.

In 2014, Khazanah recorded gains to the tune of RM3.9bil from divesting some of its shares in e-commerce business Alibaba Group, quite a significant jump considering its cost was only about RM1.3bil.

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