Special Session: Stronger Together: Catalysing Growth for Malaysia

Government-linked investment companies (GLICs) are prioritizing domestic direct investments (DDI) to stimulate economic growth.

Despite their distinct mandates, GLICs share the common objectives of boosting Malaysia’s economic standing and improving citizens’ quality of life. Their investments are key to creating high-value jobs, driving productivity and innovation, and enhancing the global competitiveness of Malaysian firms

With assets under management exceeding RM1.8 trillion, GLICs are strategically channelling investments to promote sustainable growth. This includes co-investing and collaborating in high-value sectors like healthcare, electrical and electronic (E&E), and energy transition.

GLICs’ investments are predominantly in public markets hence, emphasizing the need to shift more assets toward private equity investments. Malaysia’s private market currently accounts for just 0.4% of the public market, compared to 6.7% in the US, suggesting significant potential for growth in private investments

Malaysia faces economic challenges stemming from stagnant investment returns, slow wage growth, and an aging population that must be addressed.

While private equity in Malaysia presents huge opportunity, the returns have been stagnant. GLICs aim to close this gap by collaborating with experienced private market managers and exploring secondary markets to enhance liquidity and shorten return cycles.

Malaysia’s core economic challenge lies in low wages. Wages have lagged behind inflation, increasing pressure on the cost of living. With only 32% of GDP allocated to labor—compared to about 45% in developed countries—creating high-value jobs is essential to tackle economic challenges for future generations.

The rapidly aging population in Malaysia presents a significant challenge. The elderly population is expected to double within 25 years, increasing demand for healthcare, retirement planning, and social safety nets. With only one-third of Malaysians holding the minimum EPF savings of RM240,000, there is a clear need for wage reforms and better retirement planning.

Malaysia must enhance its attractiveness to foreign investors by boosting productivity and building supportive ecosystems.

Malaysian companies need to adopt a global mindset, moving beyond domestic market focus. Access to capital is not a barrier, as GLICs are well-positioned and willing to support firms and entrepreneurs in scaling their businesses internationally.

To maintain competitiveness, Malaysia must develop strong ecosystems around its high-value sectors. This requires collaboration between GLICs, private market managers, government agencies like MIDA, and educational institutions to build a supportive infrastructure.

The funding gap for growth-stage companies in Malaysia also needs to be addressed. While there is adequate funding for seed-stage startups and established firms, a critical gap remains for companies in the growth phase. GLICs could play a key role in supporting these firms as they transition to maturity.