WHO WE ARE

KHAZANAH IS THE SOVEREIGN WEALTH FUND OF MALAYSIA.

Khazanah Nasional Berhad (Khazanah) was incorporated under the Companies Act 1965 in Malaysia on 3 September 1993 as a public limited company and commenced operations a year later. Khazanah is owned by the Ministry of Finance Incorporated, except for one share held by the Federal Land Commissioner.

Our listed portfolio includes Axiata Group Berhad, CIMB Group Holdings Berhad, IHH Healthcare Berhad, Malaysia Airports Holdings Berhad, UEM Sunrise Berhad, Telekom Malaysia Berhad and Tenaga Nasional Berhad.

In 2018, the Government of Malaysia initiated a corporate restructuring and reorganisation of Khazanah, which involved leadership changes in the Board of Directors and Management, as well as a refresh of Khazanah’s mandate and objectives. Datuk Shahril Ridza Ridzuan was appointed as Managing Director, reporting to the Board of Directors, chaired by Malaysia’s Prime Minister, Tun Dr Mahathir Mohamad.


OUR MANDATE

KHAZANAH'S MANDATE IS TO GROW MALAYSIA’S LONG-TERM WEALTH.

Grow in this context is to sustainably increase the value of investments while safeguarding financial capital injected into the fund. Long-term refers to a period spanning generations and focuses on ensuring future generations’ ability to meet their needs. Wealth refers to the value of Khazanah’s financial assets and economic development outcomes for the nation.

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2018 IN REVIEW


2018 saw several key transactions undertaken by Khazanah. These include corporate exercises, strategic investments and divestments.

OVERVIEW OF AN INSTITUTION

MESSAGE FROM THE CHAIRMAN

When we set up Khazanah, the vision was to enable national assets to be held and managed responsibly, so that they will continue to generate wealth for all Malaysians in generations to come.

Dr Mahathir Bin Mohamad

Chairman

Alhamdulillah, it's been a year since Malaysians voted for a change in government and a new administration was elected. It is a victory of the people, for the people and by the people, especially as it was achieved peacefully. Not many countries go through transition of Governments peacefully. The new Malaysia that we are crafting has since strived to uphold the principles of fairness, good governance, integrity and the rule of law.

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GOVERNANCE AND ACCOUNTABILITY FRAMEWORK

WE ARE GUIDED BY A FRAMEWORK THAT ESTABLISHES A CLEAR RESPONSIBILITY, AUTHORITY AND GOVERNANCE STRUCTURE.

We operate within the framework of a clearly defined mandate that is aligned with the national development objectives of the Government.

The Board of Directors (Board) governs our operations and is ultimately accountable and responsible for Khazanah’s overall governance – this includes both performance and conformance matters. Tun Dr Mahathir Mohamad, the Prime Minister of Malaysia, is the Chairman of our Board and supported by a group of qualified individuals with diverse professional backgrounds and expertise as Board members. A Board Charter sets out the roles and responsibilities of the Board in overseeing the management of Khazanah.


MESSAGE FROM THE MANAGING DIRECTOR

Ultimately, our goal is to sustainably increase the value of our financial assets and enhance economic outcomes to meet the nation’s needs over the generations to come

Datuk Shahril Ridza Ridzuan

Managing Director

2018 was a highly eventful year for Khazanah. Following the General Election in May, the new Government ushered in reforms and changes that have had a significant impact on Khazanah as the sovereign wealth fund of Malaysia.

In July 2018, we welcomed a new Board of Directors comprising Prime Minister Tun Dr Mahathir Mohamad as Chairman, Minister of Economic Affairs Dato’ Seri Mohamed Azmin Ali, Tan Sri Mohd Hassan Marican, Mr Goh Ching Yin, and Dr Sukhdave Singh. Over the rest of the year, the Khazanah Board of Directors and senior management worked together on the refresh of our mandate and objectives, which you can read more about in the following pages of this report.

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FINANCIAL REVIEW

FINANCIAL HIGHLIGHTS

KHAZANAH’S PORTFOLIO VALUE AS MEASURED BY ITS NET WORTH ADJUSTED (NWA) DECLINED TO RM91 BILLION ON 31 DECEMBER 2018, A 21.6% DROP FROM RM116 BILLION ON 31 DECEMBER 2017.

Realisable Asset Value (RAV) also declined to RM136 billion from RM157 billion during the same period. The long-term portfolio performance remained on an upward trajectory, with NWA achieving an 11.0% return per annum over the last 10 years.

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REALISABLE ASSET VALUE (RAV)

Market value of all equities, securities and cash held; where no market price is available, a conservative estimate of value is used.


NET WORTH ADJUSTED (NWA)

RAV less total liabilities and adjusted to measure value created.

As at 31 December 2018 | Source: Khazanah Analysis


OUR INVESTMENTS

GROWING MALAYSIA’S LONG-TERM WEALTH

In accordance with our mandate to grow Malaysia’s long-term wealth, we will invest only where an appropriate risk-adjusted financial return can be achieved. In addition, strategic investments must also deliver identified economic impact outcomes.

We believe in creating sustainable value through appropriate engagement with the companies we invest in and the external investment managers and advisors we use.

We will abide by responsible investing practices that take into account environmental, social and governance (ESG) factors to better manage risk and generate sustainable, long-term returns. We are committed to the UN Principles for Responsible Investment (UNPRI) and the Malaysian Code for Institutional Investors (MCII) which promote the active integration of ESG considerations into investment analysis and decision-making, and asset ownership.

Targets a return of:
Malaysian Consumer Price Index (CPI) + 3% on a 5-year rolling basis

Targets a return of:

  • 10-year Malaysian Government Securities (MGS) yield on a 5-year rolling basis; and
  • Measureable economic benefits

SELECTED COMPANIES IN OUR PORTFOLIO

PEOPLE & KNOWLEDGE

OUR PEOPLE

THE STRENGTH OF KHAZANAH LIES IN OUR PEOPLE.

AROUND THE OFFICE

We try to foster a culture of hard work and quality of delivery, but in a supportive environment with strong teamwork, mutual respect and a spirit of good humour. A positive and enjoyable workplace is not only healthy for employees and the organisation, it delivers better results.

OUTSIDE THE OFFICE

Our people also excel in other spheres of life. We encourage them to receive continuing education and contribute to civil society organisations. Khazanah organises regular events such as our annual family day and multi-event sports carnival, and group retreats. Our employees are individuals with diverse talents, from different backgrounds; and actively participate in many extracurricular activities including music, writing, sports, environmentalism, and community activism.


OUR VALUES

OUR CORE VALUES GUIDE US IN OUR CONDUCT, SHAPE OUR CULTURE AND DEFINE US AS AN ORGANISATION, AND HOW WE OPERATE WITH ONE ANOTHER, PARTNERS AND STAKEHOLDERS.

  • TEAMWORK

    As a group of highly motivated individuals, we encourage cooperative efforts across all levels and activities, and will continually share ideas and knowledge towards a common goal.

  • MUTUAL RESPECT

    We value differences and treat everyone with the same respect that we expect from others. We are fair and honest in all our dealings, and always maintain confidentiality. We inspire and enable our people to achieve high performance and we believe all individuals want to achieve their fullest potential.

  • DILIGENCE

    We strive for speed and accuracy. We give every task our full degree of care and commitment, and attend to matters with a sense of immediacy. We look for new opportunities while ensuring sustainability in each of our investment and initiatives.

  • INTEGRITY

    We do what is right without exception. We believe in good governance and operate with ethics; always staying within the letter and spirit of the law.

  • PROFESSIONALISM

    We are accountable and responsible for all that we do. Timeliness is fundamental to our work processes: we always keep to our word and promises made. To ensure the best value possible for our partners and stakeholders, we do not wait for opportunities to arise but take pro-active measures to make them happen.


KHAZANAH AS A LEARNING ORGANISATION

KHAZANAH PROVIDES VARIOUS PLATFORMS FOR ACTIVE NETWORKING TO ENCOURAGE CONTINUOUS LEARNING AMONG EMPLOYEES AND STAKEHOLDERS, AND ENABLING A DYNAMIC EXCHANGE OF VIEWS AND KNOWLEDGE.

Khazanah Megatrends Forum
Tea Talks
Khazanah Residency Programme
Khazanah Resource Centre

SOCIETY AND COMMUNITY

KHAZANAH CONTRIBUTES TO THE COMMUNITY THROUGH ITS RELATED ENTITIES.

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