In today’s thread, I’ll elaborate more on Permodalan Nasional Berhad (PNB). PNB was incorporated on 17 March 1978 as a wholly owned investment arm of YPB. 
Today, it is one of the largest fund managers in Malaysia with assets worth RM312 billion and is seen by many as the most important enterprise to have been created during the early NEP years.
PNB is a licensed fund management company (limited by shares), incorporated under the then Malaysian Companies Act 1965. PNB is regulated by Securities Commission Malaysia (SC), just like any other fund management company.
PNB was given a three-pronged mandate: 1) to promote the corporate sector share ownership among the Bumiputera as well as 2) enhancing the wealth of unitholders by way of wealth creation and in 3) the management of the corporate economy.
PNB manages a total of 15 funds: 1 proprietary fund (internal money) and the 14-unit trust funds (UTFs) of its wholly owned subsidiary Amanah Saham Nasional Berhad (ASNB).
The proprietary fund originated in the grant allocation of RM200 million via YPB after the Corporation’s establishment in 1978.
The size of this proprietary fund has grown over the years and it is through this fund that PNB invests in new ventures with higher risks to supplement and safeguard the returns of the 14 unit trust funds.
Where higher risk is involved, PNB does not use the unit trust funds to go into the venture. Examples of our investments through our proprietary fund include Merdeka 118 and Battersea Power Station. UTFs will only hold investments that are mature and have recurring income.
Each of the 14 unit trusts are managed by a lead manager, with co-managers (depending on size of fund). Fund managers are organised along fund responsibilities and regions. Our regional clusters are North America, Europe, Asia & Malaysia.
These clusters are led by senior fund managers, and supplemented by global sector groups made up of the research analysts. So it’s matrix structure where global sector analysts cut across regions and fund managers look at stocks across sectors.
We are building bigger Fixed Income Team that will also tap on existing research especially for Credit papers where we may have insight from equity point of view. Idea is to do more with what we already have
Research & fund management is where bulk of our scholars end up as it’s the best training ground. Many dont stay on as we rotate often, case in point everybody in my CEO office has been in investments at some point in their career.
Ideas are generated by teams, discussed with me and then at Management level Investment Committee where ideas are challenged by all asset class heads. We also need OK from Finance, Treasury, Compliance, Legal etc before taking it further.
Our four main Investment Clusters are Public Market (equities & bonds), Private Market (private equity, private debt, infrastructure), Real Estate & Strategic Investment (our in-house Corporate Finance team that monitors & does value creation work on our investee companies).
We maintain strict Chinese Wall policy, especially between Strategic Investment & Public Market. The two teams don’t interact and sit on separate floors. Information flow on deals are only known to me and selected members of SI team.
This is why I need a room at work. It’s my first time sitting in a room having sat in an open floor plan forever. So I get lonely and have these bouts of rush to go to trading floor and annoy people. Luckily you guys are far away.
I’m digressing but I hope that was informative. And you understand we take this seriously and the process is very structured. Tomorrow I’ll explain ASNB and the funds under them.
