PETALING JAYA: Permodalan Nasional Berhad (PNB) has clarified details surrounding its investment in FashionValet (FV).
In a statement issued on Friday night (Nov 1), PNB said: “In 2018, the PNB Proprietary Fund participated in FV’s Series C fundraising through a Redeemable Convertible Preference Shares (RCPS) investment of US$5mil (RM20mil) for a small minority stake.
“This investment followed PNB’s private investment evaluation and due diligence processes, undertaken at a fair market value reflecting FV’s strong growth trajectory, with revenue increasing by approximately 60% annually over the preceding three years.
“All proceeds from the investment were allocated to FV to fund its growth plans, rather than to any existing shareholders, including the founding entrepreneurs. The rationale behind PNB’s involvement, along with other investors, was to support the expansion of a high-growth Bumiputera digital retail company as a regional platform for local designers and brands. The investment also aimed to establish physical stores to create an omnichannel presence for consumers and to develop FV’s in-house brands.”
PNB further stated that this investment aligned with the government’s call for government-linked investment companies (GLICs) to support high-potential Bumiputera enterprises operating in the new economy.
“Unfortunately, following the investment, FV was significantly impacted by the Covid-19 pandemic. Lockdowns restricted physical store operations, resulting in cash flow challenges that also affected FV’s online platform,” PNB noted.
The statement continued, explaining that FashionValet required an urgent capital injection, yet existing investors, including PNB, were unwilling to provide further funding due to the associated risks. “Following an extended fundraising period from 2022 to 2023, a Bumiputera investor stepped forward, prepared to inject new capital into the company at a reduced valuation due to the challenging circumstances and tough global fundraising environment.
“As part of this arrangement, the Bumiputera investor also offered to purchase shares from existing FV investors. Given PNB’s small stake and that the investment had been largely provided for, it was decided to accept this purchase offer, allowing FV to progress.
“Importantly, this investment was made using PNB’s proprietary fund, not the unit trust funds under Amanah Saham Nasional Berhad (ASNB) subscribed by the public.
“While we regret the loss incurred—amounting to RM18.7mil after receiving sale proceeds of RM1.3mil—this should be viewed relative to the RM337bil in investment assets managed by PNB and the RM16.4bil in investment income generated after accounting for this loss in FY23,” PNB’s statement concluded.
PNB also noted that it recognises the risks and rewards involved in venture capital and private equity investments. As such, these are managed as part of a diversified portfolio, with performance assessed on an overall basis rather than by specific investments.
To manage risk, PNB applies strict limits and guardrails to ensure investments are not overly concentrated and are primarily funded by PNB’s proprietary fund, thereby protecting ASNB unitholders from potential losses.
