Second Finance Minister, Datuk Seri Ahmad Husni Hanadzlah, said investment vehicles must be structured to attract funds that were now looking for better returns in Asia compared to Western economies.
Speaking at the 3rd Islamic Venture Capital & Private Equity Conference 2010 here today, he said private equity was an ideal source of financing for developing economies in transition.
"Private equity is stickier than portfolio funds and is not highly subjected to market shocks and volatile movements such as portfolio funds," he said.
Ahmad Husni said the Asian economies required between US$20 trillion and US$30 trillion (US$1=RM3.06) in funding for infrastructure and commercial enterprises which were above the requirement of an emerging economy in the next 10 years.
He said it was estimated that the total amount of private equity capital committed but not yet invested as at year-end 2009 totalled more than US$1.0 trillion.
"In the period between 2003-2007, the level of deal activity in the Asia Pacific region was 8.6 times higher than the period between 1995-1999.
"This compares very favourably to Europe's 2.9 times and North America's 2.7 times," he said, citing Bain & Co's Global Private Equity Report 2010.
Ahmad Husni said this pattern clearly demonstrated the attractiveness of Asia Pacific as an investment destination for private equity flow.
He said Malaysia must create an awareness of this huge potential for the growth of Islamic venture capital and private equity industry.
The two-day event is organised by the Malaysian Venture Capital and Private Equity Association and the Islamic Banking and Finance Institute Malaysia.
The conference is themed "Islamic Venture Capital and Private Equity Post Credit Crunch: Road Map for New Investment Landscape".
Source : http://www.bernama.com.my/bernama/v5/newsindex.php?id=530989 - Sept 28, 2010
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