By Emmanuel Samarathisa
STATE-OWNED ValueCap Sdn Bhd has been ordered to cease operations following a review of the stabiliser fund’s strategic direction and taking into account the decisions of the respective shareholders.
This confirms an earlier story by FocusM that ValueCap would cease operations by mid-2020 as the fund’s owners Khazanah, Permodalan Nasional Bhd (PNB) and Kumpulan Wang Persaraan Diperbadankan (KWAP) were seeking to recoup losses. The three shareholders equally own ValueCap.
The closure would be done in phases to facilitate a “smooth transition for all affected parties, including the employees,” according to a memo sighted by FocusM.
It is understood that ValueCap will be publishing a press release soon. Earlier this year, the fund had already retrenched staff through a mandatory separation scheme.
ValueCap’s fate has been in a precarious situation ever since Pakatan Harapan (PH) formed the government. This is primarily due to PH’s heavy tilt against government-linked investment companies (GLICs), a club which includes ValueCap’s owners, for more dividends to shore up public coffers. GLICs are expected to divest more assets to meet this goal.
It seemed there was some hope for ValueCap when it appointed new group chief executive Roslina Abdul Rahman, who took over Sharifatu Laila Syed Ali effective Aug 1 last year.
The company was then told to restructure its portfolio particularly to dispose of investments in politically-backed companies under the previous Barisan Nasional government. But it seems that even an overhaul of its investment portfolio has not yielded desired results.
ValueCap was reactivated in 2015 by former prime minister Datuk Seri Najib Razak as a stabiliser fund to invest and create value, especially for undervalued stocks. The game plan for ValueCap was to be defensive with shareholdings of less than 5%. This allowed the fund to be nimble, operating below the substantial shareholder threshold.
To execute its strategy, ValueCap had an approved fund of RM20 bil. But the money was injected into ValueCap in tranches with the first RM8 bil transaction made in November 2015. ValueCap’s investments, however, has not outperformed since 2017.
According to Bloomberg data, as at Dec 19, ValueCap’s shareholdings amount to RM3.1 bil across 33 companies. Its largest exposure is Capitaland Malaysia Mall Trust with 4.25% owned but its most valuable stock is Malayan Banking Bhd (0.71%) with a market value of RM667.45 mil. – Dec 19, 2019
