Excerpts of Q&A with Khazanah Nasional managing director
Excerpts from the South China Morning Post’s interview with Khazanah Nasional managing director, Tan Sri Azman Mokhtar.
How important are technology investments when it comes to Khazanah’s portfolio?
Technology and innovation is a very important part of our portfolio. If you take a narrow view of how many tech companies we have, percentage wise it may not seem big, although we have big names in our portfolio including Alibaba, and companies like Palantir, probably one of the world’s largest big data analytics companies.
[Our portfolio] includes emerging companies – one deal that we’ve went in, and out [was] Skyscanner. We also invest into funds, which invest in famous names, whether it’s Uber or Airbnb.
The idea of pivoting in technology investment is very important, because technology moves so fast.
There’s a company called Blippar [that we’ve invested in], based in London. What they do is a visual search engine – they want to be the Google of visual search, with technology like facial recognition, image recognition.
They work with Fortune 500 brands. They’ve started doing AR/VR, and they’re pivoting to adjacent tech like AI, which is big today.
We spent the last 4-5 years putting that base infrastructure in, and thankfully through investments like Alibaba and so on that we [had] from day one, [were] almost immediately profitable which is a nice position to be in.
What is your view on the technology sector in Malaysia?
A lot of these sectors [in Malaysia] are best deployed through entrepreneurs, but sometimes entrepreneurs need backing too, so we back them. We don’t have to own the leading stake, we don’t want to have the leading stake. Usually for this kind of technology, it should be entrepreneur-driven.
Honestly, Malaysia is a bit like a mixed economy. You have people running it like an institution but you’ve also got amazing entrepreneurs. I think we’ve worked out an equal system, where both can coexist, compete sometimes, and work together. So this Grab link (between Johor Bahru and Singapore) is potentially a very good idea. If we can cross two countries, use technology, promote entrepreneurship – everybody wins.
If you look at us 10-12 years ago, Malaysia did not do too badly, however it’s still relatively small. So I said all of you [Malaysian companies] must have a regional strategy, each and every one of you. It is not enough to just be a national champion; you must have a regional strategy and become a regional champion. We had the belief 10-12 years ago that by today, a regional champion will be clashing with a global champion anyway. Regional equals global. We wanted five regional champions by 2015. To be a regional champion, you’ve got to be global class. Otherwise a global fellow will come and kill you anyway.
A major part of Khazanah’s portfolio are infrastructure and legacy companies. How should these firms reinvent themselves to stay competitive?
Infrastructure remains a strength [for Khazanah], such as the power sector and then consumer-facing businesses. Staples like banking, health care, telecommunications, [are industries which] we think we have strengths in.
For these sectors, they have to revise their business model. If you’re a bank, you need to bring in mobile banking, if you’re a telco company, you need to bring in other mobile apps. As we build these tech franchises, we work with some investee companies and partners to explore how to bring in such services, whether its payment systems or mobile health care.
What is your idea of a potential partnership with Singapore-based ride-hailing start-up Grab, for the Singapore-Johor Bahru link?
I was on the panel with Anthony Tan from Grab (at the Global Transformation Forum in March)… Iskandar Malaysia is this special zone [to capitalise on and complement] Malaysia-Singapore [synergies]. But the frustration is the crossing [between the two countries], it can be half an hour, can be two hours. Every day thousands of people cross over. For years, we’re doing all these things, all these hard infrastructure, soft infrastructure investments but we also need to fix simple things like crossing.
One simple idea was, since Grab has cars on both sides in Singapore and Malaysia, if we can fix up a quick link – either a fast track for Grab and Uber or any other licensed player. Even a short ferry hop across, if we all put our minds to it. The Malaysian side is already ready. The ferry terminal is underutilised.
If we can make it seamless... let’s say somebody from Jurong or Marina Bay wants to go to Iskandar for a day trip and can’t be bothered to drive – you don’t know how long it’ll take you to cross over. So you just dial one number... Grab will arrange one car to come to you, if you have Grab ferry as well [all the better]. On the other side another Malaysian car will take you, [so it’s] seamless. We could use technology to cut through all the bureaucracy on both sides. This is my way of supporting entrepreneurs, and Malaysian, Southeast Asian companies.