18. The SWF’s investment policy should be clear and consistent with its defined objectives, risk tolerance, and investment strategy, as set by the owner or the governing body(ies), and be based on sound portfolio management principles.
18.1. The investment policy should guide the SWF’s financial risk exposures and the possible use of leverage.
18.2. The investment policy should address the extent to which internal and/or external investment managers are used, the range of their activities and authority, and the process by which they are selected and their performance monitored.
18.3. A description of the investment policy of the SWF should be publicly disclosed.
The Investment Policy Statement (IPS) clearly outlines our Investment mandate, objectives and principles.
Khazanah’s mandate is investing to deliver sustainable value for Malaysians. The mandate is to be achieved by pursuing commercial investments to preserve and grow long-term value of our assets, as well as undertaking investments that deliver economic or societal returns for the nation.
Khazanah pursues its overall mandate through the following investment reporting structure:
Investments Portfolio – intergenerational portfolio that seeks to generate risk-adjusted returns on a long-term basis
Dana Impak Portfolio – invests in increasing Malaysia’s economic competitiveness and in building national resilience while delivering socioeconomic impact for Malaysians
Developmental Assets – intended to deliver high economic impact through long-term developmental investments
Special Situation Assets – assets that require turn-arounds in terms of profitability and sustaining operating cash flows
Our risk appetite is articulated through a set of Risk Appetite Statements for key material risks identified under the investment mandate, which is approved by the Board Audit and Risk Committee.
The large majority of our investments are conducted using in-house capabilities. Where we do engage external managers, the selection and monitoring processes and policies are included in the respective asset classes’ Investment & Divestment and Management & Monitoring manuals.
The IPS is in our annual report and available in our website.