Malaysia’s Khazanah Got Aboard The Alibaba Gravy Train

Malaysia’s Khazanah Got Aboard The Alibaba Gravy Train
By Charliepug (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Khazanah, the Malay word for treasure, is also the name of Malaysia’s sovereign wealth fund. Like many major Asian investors, Kazanah saw value ahead of Alibaba’s IPO and invested $400 million in the burgeoning Chinese ecommerce giant back in 2012 and 2013.

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The wealth fund disclosed on Wednesday it made a profit of more than $1 billion in selling a portion of its Alibaba holdings as it reported its financial performance for 2014. In the the regulatory disclosure, Kazanah also noted it was planning to increase investment in the U.S. tech sector (the fund opened an office in San Francisco in 2013).

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Details on Kazanah’s investment in Alibaba

Khazanah’s disclosure highlighted that it had invested a total of $400 million in Alibaba over two years ahead of the IPO, representing a stake of 0.6%. The fund sold a portion of its holdings after the IPO (making a profit of more than $1 billion), and is still holding onto an undisclosed amount of shares.

“We are still confident that the upside of the stock is there,” commented Azman Mokhtar, managing director of Khazanah.

More on Kazanah Wealth Fund

The Kazanah Wealth Fund was established by law back in 1993 with a mission “to make strategic investments” for national development. The fund is also responsible for managing a national investment program designed to transition several government-linked quasi-public companies (Malaysia Airlines) into profitable commercial  businesses.

Wednesday’s filing also noted that the value of its portfolio of securities and cash was up last year by over 7.4% to Rm145 billion (around $40 billion).

Kazanah’s top performers for the year were Axiata, a Malaysian telecoms group, and Tenaga Nasional, an expanding electricity conglomerate.

The fund’s return for 2014 would have been notably higher except for its major position in Malaysia Airlines, which had a disastrous year as it was hit with twin tragedies in the loss of two aircraft.

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