Malaysia plans to boost investment in local startups

KUALA LUMPUR, Malaysia (MNTV) — Malaysia’s big state-linked funds will increase their investments in local startups and venture capital companies to promote the government’s goal of building a resilient domestic economy in the face of external headwinds, says a minister.

Second Finance Minister Amir Hamzah Azizan told Nikkei Asia in an interview that Employees Provident Fund, state sovereign wealth fund Khazanah Nasional and investment management company Permodalan Nasional Berhad will commit an additional 120 billion Malaysian ringgit ($27 billion) to private companies, including startups, over the next five years.

“We’re encouraging institutional funds to reinvest in Malaysia, not in traditional areas like fixed income or [publicly traded] equities, but in private markets,” he said, adding that the government aims to channel this capital into high-growth sectors, such as technology and infrastructure.

The three institutions together manage assets totaling around 1.7 trillion ringgit. The 120 billion ringgit in new commitments would add to their usual domestic allocations of 440 billion ringgit annually. 

The move is part of a broader strategy to reduce Malaysia’s reliance on foreign direct investment (FDI) and to strengthen its economic resilience as geopolitical risks loom, the minister said.

“This reduces Malaysia’s risk exposure because we no longer rely solely on FDI exposures. Instead, we’re building a more resilient and diversified economy by leveraging both domestic and foreign investments,” Hamzah said.