Kenanga Investors launches one-of-a-kind Unicorn Fund

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Ismitz Matthew De Alwis

KUCHING: Kenanga Investors Bhd (Kenanga Investors) has launched one-of-a-kind fund Kenanga Global Unicorn 1 (KGU1), which provides investors access to investments stemming from future ‘big idea’ start-ups.

The fund feeds into the Ericsenz-K2 Global Unicorn Fund (target fund) which is a unitised fund targeting superior medium term returns by investing primarily in the securities of unicorn companies.

Privately held start-up companies, with near term visibility of an initial public offering (IPO) within six to 24 months or are valued at over US$1 billion, are generally known as unicorns due to their statistical infrequency.

“Unicorn companies were much rarer two to three years ago, but now there are between 80 and 100 each year attaining that status that is often associated with signs of a near term IPO,” Kenanga Investors chief executive officer and executive director Ismitz Matthew De Alwis remarked.

Asia is leading the way with at least 30 per cent of unicorns today coming from China when it used to be a term mainly associated with US-based companies.”

He pointed out that this fairly recent development poses a lot of opportunities for investors to tap into, but with many unicorn companies choosing to stay private longer, they are not accessible to the everyday investor.

“It is the first time that this form of private equity investment is available to investors in Malaysia. The KGU1 offers exclusive access for our clients to invest into these otherwise hard-to-reach investment opportunities”.

KGU1 aims to provide capital appreciation at the end of the fund’s maturity by investing in the target fund and is measured against a targeted 12 per cent internal rate of return per annum. To note, this is not a guaranteed return and it is only a measurement of the fund’s performance. The fund may or may not achieve the 12 per cent internal rate of return per annum in any particular financial year.

The target fund is managed by Ericsenz Capital Pte Ltd (Ericsenz Capital) a Singapore-based venture capital and private equity firm, licensed under the Securities and Futures Act and regulated by the Monetary Authority of Singapore. It invests in high growth middle-market companies primarily within the technology, healthcare, consumer and energy sector. The target fund manager works with K2 Global as its strategic advisor; a venture capital firm with access to a wide selection of late-stage private technology companies located in upcoming tech hubs.

With many unicorns emerging from within the relationship-driven Asian region, Kenanga Investors is confident that this collaboration with the target fund Manager will be valuable in order to leverage on Ericsenz Capital and K2 Global’s close network of commercial, strategic, investment, media and government partners in both Asia and the US.

“We are on an ongoing journey to explore new opportunities in today’s investment landscape. Therefore, the KGU1 is another exciting addition to the suite of alternative products that we carry.”

He believes that at this point in time, Malaysians are more than ready for alternative forms of investments.

“KGU1 is the link between sophisticated investors and up-and-comers of the international startup community. It keeps our investors at the forefront of investment opportunities as they are given access to future big ideas and possibilities arising from these innovative companies at early stages of their growth,” De Alwis said.

The buy and sell discipline adopted by the target fund manager is not speculative and is a measured assessment of the market and macro environment to determine alpha.

The fund is suitable for sophisticated investors who have medium to long-term investment horizons. It will be available in both ringgit and US dollar classes which offers options for investors to invest in their preferred currency.

The minimum investment amount is RM100,000 (ringgit class) or US$25,000 (US dollar class).