Kenanga unveils fund that taps into unicorn tech start-ups

PETALING JAYA: Kenanga Investors Bhd has launched its Kenanga Global Unicorn 1 (KGU1) fund that provides an opportunity for investors to tap into technology start-ups “unicorn” companies, a shorthand for privately held companies with valuations exceeding US$1 billion (RM4.18 billion).

Its executive director and CEO Ismitz Matthew De Alwis explained that KGU1 feeds into a target fund called Ericsenz-K2 Global Unicorn Fund, a unitised fund targeting superior medium-term returns by investing primarily in the securities of unicorn companies.

He said in a statement that unicorn companies were much rarer two to three years ago, but now there are between 80 and 100 each year attaining that status that is often associated with signs of a near-term initial public offering.

In the past, unicorns were mainly associated with US-based companies but now Asia is leading the way with at least 30% of unicorns today coming from China.

De Alwis pointed out that this fairly recent development poses a lot of opportunities for investors to tap into, but with many unicorn companies choosing to stay private longer, they are not accessible to the everyday investor.

“It is the first time that this form of private equity investment is available to investors in Malaysia. The KGU1 offers exclusive access for our clients to invest into these otherwise hard-to-reach investment opportunities”.

Kenanga aims to provide capital appreciation at the end of KGU1’s maturity by investing in the target fund and is measured against a targeted 12% internal rate of return per annum.

Ericsenz-K2 Global Unicorn Fund is managed by Singapore-based venture capital and private equity firm Ericsenz Capital Pte Ltd, in collaboration with K2 Global as its strategic advisor, a venture capital firm with access to a wide selection of late-stage private technology companies located in upcoming tech hubs.

Kenanga outlined that the buy and sell discipline adopted by the fund manager is not speculative and is a measured assessment of the market and macro environment to determine alpha.

It said the fund is suitable for sophisticated investors with a medium- to long-term investment horizons.

The fund will be available in ringgit and US dollar-denominated classes which offers options for investors to invest in their preferred currency.

The minimum investment amount is RM100,000 or US$25,000.