In a strategic move to bolster Malaysia’s structural reforms as envisioned in the Ekonomi MADANI framework, the Ministry of Finance (MOF) is spearheading a programme aimed at synergising efforts across Government-Linked Entities to catalyse growth in key economic sectors.
Known as GEAR-uP 💫💫💫
The first phase of the programme will see 6 leading Government-Linked Investment Companies (GLIC) collectively pledge to invest RM120 billion in domestic direct investments (DDI) over the next 5 years, on top of RM440 billion in public market investments under their steady state investment programmes.
These investments are primarily directed towards:
- High-growth high-value (HGHV) industries such as the energy transition sector,
- Advanced manufacturing especially in the semiconductor space,
- Investments across all life cycle of firms from start-ups, venture capital to mid-tier companies and finally to support listing of such companies.
These investments form the main thrust of GEAR-uP to spur the growth of new economic ecosystems and further drive GLICs’ participation in nation-building.
The 6 GLICs are Khazanah Nasional Berhad (Khazanah), the Employees Provident Fund (EPF), Kumpulan Wang Persaraan (Diperbadankan) [KWAP], Permodalan Nasional Berhad (PNB), Lembaga Tabung Haji, and Lembaga Tabung Angkatan Tentera (LTAT).
Additionally, they will leverage on their respective expertise to achieve a common goal of “raising the ceiling” of Malaysia’s economic stature and “raising the floor” of the rakyat’s quality of life.
GLICs and their roles 👀
- KhazanahTo embark on its Malaysia investment strategy that is anchored on ‘A Nation That Creates’ framework to increase national productivity and competitiveness.
Key focus areas include transforming firms to unlock value, energy transition, digitalisation, capacity building and upskilling and spearhead efforts to enhance Malaysia’s connectivity through its aviation portfolio.
Khazanah will ensure semiconductor ecosystem resilience, nurture mid-tier company growth and invest in the venture capital ecosystem, among other initiatives planned to support GEAR-uP.
The recent acquisitions of MAVCAP and Penjana Kapital is part of its efforts to establish the National fund of funds (NFOF) which would further enhance capital access for start-ups, driving economic growth and innovation. - KWAPTo empower Malaysian private markets across private equity, infrastructure and real estate, with a focus on providing catalyst funds for venture capital and growth-stage firms via Dana Perintis and Dana Pemacu.
KWAP has identified 8 sectors, including amongst others food security, digital economy, energy transition and advanced manufacturing. - PNBTo modernise Malaysian industries and corporates towards higher value-added and sustainable activities, with specific focus on investments in new industrial parks, supporting automation and smart farming in palm oil, and green and energy transition assets.
PNB remains committed to empowering and uplifting the Bumiputera community, including programmes to nurture the next generation of Bumiputera entrepreneurs and corporate leaders; and enhancing financial security and literacy for young Malaysians. - EPFTo focus on advancing a dignified and prosperous aging society which involves investing in commercially viable sustainable healthcare solutions in partnership with the Government, including building private wings in public hospitals in line with the Health Transformation agenda championed by the Ministry of Health.
In line with its mandate, the EPF will continue to strengthen social protection and pension reforms, emphasising old-age income security for all Malaysians. - Lembaga Tabung HajiTo broaden the role of Islamic banks including strengthening sustainable social impact through Islamic finance instruments for more streamlined disbursements to the poor; and augmenting the Islamic financial system through strategic collaborations with other key financial institutions and market players.
- LTATTo elevate Malaysia’s pharmaceutical value creation by strengthening its capacity to produce local biopharmaceutical products.
Further, LTAT remains committed to uplifting the social well-being of the Malaysian Armed Forces by supporting the transition ecosystem for veterans to transition to second careers.
In addition, Kumpulan Wang Amanah Negara (KWAN) will be strengthened as an intergenerational wealth fund of Malaysia with new sources of contributions, revised utilisation guidelines, and strengthened investment mandates to ensure sustainability and a retention of wealth for future generations of Malaysians.
Governed by the National Trust Fund Act 1988, KWAN’s current fund size stands at approximately RM20 billion.
Governed by the National Trust Fund Act 1988, KWAN’s current fund size stands at approximately RM20 billion.
Source: Ministry of Finance on 8 August 2024
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