Private equity, venture capital funding up 26.75% to RM14.83b in 2021, says SC

KUALA LUMPUR (March 28): Total committed funds in private equity (PE) and venture capital (VC) rose 26.75% to RM14.83 billion in 2021 from RM11.7 billion in 2020, according to the Securities Commission Malaysia (SC)’s 2021 annual report released on Monday (March 28).

Of that amount, RM9.65 billion was for PE, while RM5.18 billion was for VC.

For PE, commitments were sourced largely from corporate investors (28.56%), individuals and family offices (19.12%), and financial institutions (11.89%).

Meanwhile, government agencies and investment companies (45.01%), sovereign wealth funds (27.90%) and corporate investors (19.73%) make up the top three sources of VC funding.

The top three registered corporations by amount of investor commitments as at end-2021 were Creador, Xeraya Capital, and Malaysia Venture Capital Management Bhd (Mavcap).

VC investments in 2021 were concentrated on early stage (51.26%), followed by seed (20.46%) and growth (17.88%) opportunities.

PE investments were primarily channeled into growth plays (87.14%), with some investments made to early stage opportunities (12.03%).

In total, 36 VC and 29 PE deals were recorded in 2021.

In terms of target industries, medical and biotechnology (63.56%) saw the highest share of VC investment in 2021, followed by information and communication (25.88%), and financial services (4.26%).

As for PE, investments were largely channeled to wholesale and retail trade (34.97%) in 2021, followed by accommodation and food services (32.24%), and financial services (8.15%).

Divestments in 2021 were mainly exits in the growth stage. Trade sales were a common exit route for VCs, while secondary sales to investors or other managers were major liquidity routes for PE.

Meanwhile, the total number of registered corporations stood at 124 as at Dec 31, 2021.

The VC segment accounted for 105 registered corporations, while the PE segment consisted of 19 registered corporations.

As at end-2021, the number of professionals employed by the industry with at least four years of experience stood at 344.

Read more stories from the SC Annual Report 2021 here.