IT is less expensive to acquire equities or put in money in Southeast Asia (SEA) businesses, according to a private equity and venture capital management company.
"Investors are also now looking at SEA with some interest because they find the fundamental still there. There is growth and the demographic is positive," said the head of CIMB Private Equity and Venture Capital, Darawati Hussain.
She said investors are also finding China, Vietnam and India to be quite expensive to deploy their funds, "so there is some interest in looking at investment opportunities in other countries in this region, including Malaysia."
"Sometimes when you compare the pricing that you have to pay to get a stake in some of the businesses (in the three countries), it is a lot higher than you usually have to pay to get equity in SEAs businesses," she said.
Speaking to reporters on the sidelines of the Asian Venture Capital Journal Private Equity & Venture Forum, Darawati noted that there are challenges to Malaysian entrepreneurs and businesses in trying to compete in the global stage.
"They have the challenge now because they may not be big and they cannot go to the bank to get further lending as their asset base is quite low.
"So private equity and venture capital are very important to businesses which are trying to grow their businesses," she said.
Nevertheless, she said Malaysia has a lot of funding, made available from the government, close to RM2 billion to invest in early stage and growth stage companies.
"In Malaysia, the (private equity and venture capital) industry is still quite small. As we are trying to develop more and more local firms to support and provide funding to local businesses, the government has been very instrumental in providing funding as well."
CIMB Private Equity & Venture Capital is a subsidiary of CIMB Group, with US$400 million funds under management, primarily third party funds. — Bernama
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