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At Khazanah, we are guided by our purpose of investing to deliver sustainable value for Malaysians. During our 30-year journey as the nation’s sovereign wealth fund, our long-term strategy for national development has seen us build regional champions across the corporate landscape, catalyse the growth of innovators and new industries, and spur the adoption of emerging technologies and strategies that future-proof the nation.
Our strategy also guides us in maintaining a diversified investment portfolio to minimise the impact of challenging economic periods. In this, The Khazanah Report 2022 (TKR2022), we detail the wide-ranging actions we have taken to grow our portfolio during the past year, underpinned by the goal of growing Malaysia’s wealth over the long-term.
Sitting at the nexus of the Government, private sector and rakyat (community) of Malaysia, we play an important role in developing the nation, driven by our focus and strategy in Advancing Malaysia.
While our foremost aim is to deliver strong long-term risk-adjusted returns across our portfolio, the unique position we occupy in the nation endows us with a greater purpose. We also play a role in catalysing the growth of emerging sectors and companies within the nation, contributing towards the nation’s long-term competitiveness and prosperity, and building more vibrant communities for all.
Ultimately, our activities and investments are anchored towards delivering long lasting impact towards a better Malaysia, responsibly.
We participate in Malaysia’s capital markets as an active shareholder, encouraging our investee companies to create value by crowding-in new private investments and driving regulatory improvements, all while promoting the adoption of cutting-edge technologies, nurturing innovation and encouraging more sustainable practices. These actions are carried out with the overarching aim of spurring Malaysia’s capital market and contributing to the nation’s development.
Dana Impak (our impact fund) is a RM6 billion commitment over five years to invest in catalytic sectors that will increase the nation’s competitiveness and build its resilience.
Investments under Dana Impak are guided by six themes:
With a focus on driving long-term societal value, we introduced the SEMARAK framework, an impact assessment tool that will enable us to qualify the impact of our investments beyond their financial returns, in June 2023.
Our international investments span a wide range of asset classes and markets. We strategically align these investments with global megatrends and emerging technologies, serving the twin goals of growing our portfolio value and facilitating flows of knowledge, networks and investment opportunities to Malaysia.
We continue to impact Malaysian society via our affiliated entities, including Yayasan Hasanah, Yayasan Khazanah, Khazanah Research Institute, Taman Tugu and Think City, to build capacity and nurture more resilient communities.
We deliver societal value across the pillars of:
By investing in a diversified portfolio and practicing prudent management of debt and liquidity, we position ourselves to meet our long-term risk-adjusted return targets. We are cognisant of the shifting macroeconomic and geopolitical environment, which underlies the importance of continuing our rebalancing efforts in achieving our target Strategic Asset Allocation (SAA), improving diversification and portfolio resilience.
We recognise our role in shaping an equitable and responsible transition for Corporate Malaysia in the adoption of sustainability practices. Our Sustainability Framework guides our approach to deliver sustainable value as both an enterprise and investor, and our medium and long-term commitments are outlined in our Environment, Social and Governance (ESG) Targets.
Our people are a key enabler of our success. By upholding a culture of high performance and collaboration, providing talent development opportunities and maintaining diverse and inclusive work environments, we support them in reaching their full potential, thereby building a digitally-savvy and future-ready Khazanah.
In developing a winning team, we are guided by our Core Values, which emphasise on the importance of holding ourselves accountable, respecting different viewpoints and supporting one another at all times.
As Malaysia’s sovereign wealth fund, we have a duty to create value beyond just monetary terms. Through our reach and influence, we actively engage with our portfolio companies to drive the adoption of sustainable practices that deliver long-term benefits for the nation, communities and natural environments.
We aspire for positive outcomes and ensure our actions today produce results towards a positive economic, social, and environmental change, for current and future generations.
We aim to build on the status quo, by identifying opportunities to create shared value through managing risks and preparing for the future.
We manage and mitigate risks to ensure that our actions do not expose stakeholders to negative effects on the social fabric, the economy, or the environment.
2022 was a year of significant challenges, both in Malaysia and around the world, with ongoing geopolitical conflicts compounded by a fragile macroeconomic situation. Against this backdrop, my immediate priority was to ensure collective action by all in driving the nation’s recovery efforts.”
Khazanah, together with other Government-Linked Investment Companies (GLICs) and Government-Linked Companies (GLCs) in Malaysia, will bring forth a mandate to forge a fair and inclusive Malaysia that embraces advanced technology, innovation and seeks new growth areas while meeting the needs of all Malaysians, equitably.
As the nation’s sovereign wealth fund, Khazanah is in a position to play a central role in reaching these aspirations. Through targeted investments in national champions and startups, across key and emerging sectors alike, Khazanah is working on the country’s continued recovery and laying the groundwork for a stronger and more sustainable future.
As I write this statement, the world is still reeling from the aftereffects of the pandemic. Geopolitical turbulence has increased the propensity for global inflation and disrupted supply chains, while the uncertainty brought about by macroeconomic challenges has been compounded by the acceleration of advanced digital technology. With this confluence of factors, it is easy to conclude that, in our modern world, change has become the only constant.
2022 was indeed challenging but true as this may be, at Khazanah, we remain guided by a purpose that remains necessarily unchanged – to deliver sustainable value for Malaysians and build the nation for a better tomorrow.”
Through our investments, we seek to fulfil our mandate of growing our Assets Under Management (AUM) and deliver sustainable economic and societal value for Malaysians.
Our Dana Impak (our impact fund) invests with the aim of increasing Malaysia’s economic competitiveness, building national resilience while delivering socio-economic impact for Malaysians.
Our Developmental Assets portfolio comprises investments with the potential to deliver high economic impact, but where a longer gestation period is required to realise the targeted financial returns and achieve their national and/or societal benefits and outcomes.
Assets that require turnaround in terms of profitability and sustainable operating cash flows, with specific targets and action plans approved by the Board on an annual basis.
We continue to deliver societal value through efforts which benefit various communities in Malaysia. These impactful initiatives are targeted towards priority socio-economic outcomes – advancing communities, building capacity and future-proofing the nation.
Our societal value creation initiatives are mainly executed by our key execution arms, namely Yayasan Hasanah, Yayasan Khazanah, Khazanah Research Institute, Think City Sdn Bhd and Taman Tugu Project Development Sdn Bhd. Additionally, we undertake direct efforts in selected areas such as Galeri Khazanah and the Khazanah Residency Programme.
With the aim of strengthening our future contributions to society under the pillar of Building Capacity and Vibrant Communities, we establish the Societal Value Monitoring & Alignment (SMA) unit in February 2023 to enable greater alignment between our purpose and the execution of our societal value initiatives, empowering us to make a bigger impact.
Yayasan Hasanah (Hasanah), a foundation of Khazanah Nasional Berhad, is catalysing social change in Malaysia through its grants in five core areas: Education, Community Development, Arts & Public Spaces, Environment and Knowledge.
Supporting our goal of enhancing Malaysia’s global competitiveness, Yayasan Khazanah (YK) identifies, supports and nurtures top local talents with the potential to assume leadership positions in the corporate or government sectors.
With the aim of creating a vital green lung for Kuala Lumpur, we collaborated with a range of private and public sector entities to develop Taman Tugu, a 66-acre park in the heart of the city that is free to access for all. Taman Tugu is one of our largest non-profit corporate social responsibility initiatives.
A fully-owned subsidiary of Khazanah, Think City develops and implements innovative solutions that make cities more people-friendly, liveable, resilient and sustainable. Formed in 2009 to contribute to the urban regeneration of George Town, Penang, Think City is now present in cities across Malaysia, delivering impactful projects that create more dynamic urban spaces with a focus on four main areas of impact: Placemaking, Resilience, Strategy & Analytics and Culture-based Economic Development.
Khazanah Research Institute (KRI) carries out research on pressing issues facing the nation with the objective of recommending public policies that sustain and improve the socio-economic well-being of Malaysians.
We support the Malaysia Short Term Employment Programme (MySTEP) by the Government of Malaysia, which provides training and on-the-job placement to Malaysians aged 18 and above through a wide range of industry partners. With cognisance of the shifting demands of the job market, the programme focuses on instilling relevant knowledge, future-ready skills and the right mindset for Malaysians to achieve long-term career growth, placing particular emphasis on addressing the issue of unemployment amongst university graduates.
As part of our mission to preserve Malaysia’s rich social and cultural heritage, we launched Galeri Khazanah in August 2022.
Our people are the foundation upon which we create value. By encouraging collaboration and openness while providing avenues for meaningful learning and development, we drive high performance standards across our workforce, positioning us to deliver greater value for the nation.
To bring out the best in our people, we have forged a culture that is founded on three core values:
Delivering results in an ethical manner
Deriving value from diverse ideas and opinions
Being mindful of the priorities and circumstances of others
To embed the principles of DEI into the people and organisational culture of Khazanah while respecting local laws and cultural practices
Drive a diverse, equitable and inclusive mindset
DEI mindset to be consciously applied in our behaviour
Actions will positively impact employee performance and drive innovation