KHAZANAH NASIONAL A WHOLLY OWNED GOVERNMENT INVESTMENT COMPANY INVESTING IN AMERICA AGRESSIVELLY

Khazanah Americas Incorporated is established in San Francisco

by Shahril Ibrahim Director, Khazanah Americas Incorporated

Source: KHAZANAH NASIONAL : http://kperspectives.khazanah.com.my/Get_To_Know_Us-@-Khazanah_Americas_Incorporated.aspx

Last month, Khazanah Nasional Berhad opened its third regional office after Beijing and Mumbai with the aim of facilitating investments in the Americas which has great strategic significance to Khazanah, our investee companies and Malaysia overall. Located in San Francisco, Khazanah Americas Incorporated or KAI will greatly assist Khazanah to better evaluate investment opportunities particularly in the innovation and technology sectors. San Francisco is home to Silicon Valley where some of the largest technology companies, leading universities as well as thousands of exciting new start-up companies are located.

It is an established fact that San Francisco and its surrounding environs have established a vibrant ecosystem for supporting entrepreneurs and innovation. Khazanah is confident that KAI will be able to build a pipeline of talent and collaboration between Malaysia and the United States, which will help accelerate Malaysia’s own innovation and technology capabilities in the long-run. The move by Khazanah to venture into the US will benefit the country’s thrust into new value-generating economic sectors as outlined in the country’s New Economy Model (NEM) launched in 2010. KAI, as an extension of Khazanah, will also tap on opportunities to showcase the country as a premier investment hub in Asia as well as promote investment opportunities in Iskandar Malaysia as well as in our various investee companies.

Khazanah’s latest overseas venture is also wholly consistent with the mandate given to us by the government in 2004 to generate sustainable value and raise national competitiveness. One of our key deliverables was to expand into New Economy Investments (NEI) and new geographical areas, as explained in Pillar 3 of our mandate. What this means is that Khazanah will invest in new sectors and geographies which can help catalyse growth and have a transformative impact on Malaysia’s economy. Thus, cross-border linkages are necessary for the country’s long-term competitiveness. The primary investment focus of KAI will be in the areas of healthcare, life sciences, sustainable development, telecommunications and media.

The US is the largest economy in the world and continues to produce nimble and exciting new technological developments which continue to be brought to the world stage and consumers by entrepreneurs, visionaries and dreamers. This is a wonderful opportunity for Khazanah to deepen business linkages and strong relationships in the Americas in order to continue building true value. A physical presence via KAI is thus vital in order to build bridges between two business cultures and foster trust within the innovation and technology hubs in San Francisco and Silicon Valley. KAI will also serve as a base for Khazanah’s investee companies seeking to expand into the Americas as well as promote Malaysia as a base for American technology operations in Asia.

The office space, at 600m² is located in downtown San Francisco and is designed to accommodate a small US-based team with sufficient space for teams from our investee companies. Khazanah already has investments in the US, and the office will also help monitor and manage its investment portfolio. The US office will ease geographical, cultural and time difference between Malaysia and the US and help provide a beach head for further opportunities.

KAI also allows Khazanah to build relationships with potential business partners not unlike what technology and investment firms do all around the world; the personal touch and physical presence cannot be underestimated. This is why global giants like Google and venture capital businesses have permanent offices in many parts of the world in order to cement relationships and ultimately grow value.

Khazanah’s expansion in the Americas is part of our larger strategy to become more global in scope. Since 2005, Khazanah, in line with our strategy, has grown our presence beyond Malaysian shores. As of 29 May 2013, Khazanah’s overseas investments represent approximately nine percent of its total investment portfolio of RM135.9 billion¹. On a see-through basis² however, the percentage is larger and represents approximately 35 percent of Khazanah’s investments portfolio¹.

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1. Source: Khazanah analysis
2. Note: See-through basis is an estimation of attributable value by exposure