Fund Plans Fund-Raising in 05

MALAYSIA – The Malaysia Venture Capital Management (MAVCAP) is in the final planning stages for kicking off a fund-raising drive next year for its second venture fund, Fund II, for which the Malaysian government is budgeting $75 million.

MAVCAP, a government-linked company is wholly owned by the Malaysian Government, and its shares are publicly listed, but not traded.

Bernard Yaw, a senior vice president of MAVCAP in Kuala Lumpur, says that MAVCAP is tasked with building the VC industry in Malaysia.

Yaw says that the company is still investing from its first fund of $125 million. Of that first fund, $25 million was allocated to help establish four venture firms, $30 million for seed-stage investments, and $70 million as post-seed investments. To date the first fund has invested in 59 portfolio companies, three of which have had inital public offerings on the MASDEQ, the Malaysian equivalent of the Nasdaq.

MAVCAP is one of three government related groups working in venture capital in Malaysia. The other two are a Ministry of Science and Technology venture program and the Multimedia Super Corridor program. Each of the three is run separately and has a different area of focus.

MAVCAP also administers a “cradle program,” created in May 2003 with $25 million, which Yaw says his company provides to individuals, or entrepreneurs, for a “proof of concept” and to develop a business plan. The program also provides mentoring to its applicants, connections with bankers, consultants, corporations and VCs already in the market in which an entrepreneur is interested.

Yaw says that to date, MAVCAP has committed about one-fifth of its cradle funds.