MALAYSIAN sovereign wealth fund Khazanah Nasional will unveil a plan this month to cut back its stakes in non-strategic assets and offshore investments in an effort to raise money for government coffers, reported Reuters.

The Pakatan Harapan (PH) government has been intent on raising money to counter a fiscal deficit and a massive debt from the multi-billion dollar 1Malaysia Development Bhd (1MDB) scandal.

The new strategy, which is set to be announced at Khazanah’s annual review on February 28, looks to cut the fund’s stakes in some companies identified as non-strategic to 15-25%, sources told Reuters.

The US$39 billion (RM158.6 billion) company is also expected to reduce its physical presence in overseas locations such as London, Mumbai and Silicon Valley.

The sources, who declined to be identified due to the sensitivity of the matter, added that Khazanah’s aim is to manage its holdings as a portfolio investor rather than as an active direct investor.

Sources said Khazanah’s assets could attract interest from Japanese players, other Asian investors and global funds.

Following the 14th general election, Khazanah has experienced a management revamp which led to a review of its investments, which span more than 20 countries under two categories, strategic and commercial.

Companies such as state utility Tenaga Nasional, struggling Malaysia Airlines, which it took over four years ago, Malaysia Airports Holdings and Telekom Malaysia have been identified as strategic holdings and their ownership is unlikely to change, the sources told Reuters.

The rest of its portfolio could see cuts, such as 27%-owned CIMB Group Holdings, 36%-owned Axiata Group and the fully-owned engineering infrastructure and services conglomerate UEM Group, they said.

In November, Khazanah announced a deal to sell a 16% stake in IHH Healthcare (IHH), reducing its stake in the Asian hospitals group to about 26%. – February 14, 2019.