(June 14, 2012) —The Kuwait Investment Authority (KIA) and Malaysia’s Employees Provident Fund (EPF) are set to become cornerstone investors for what is expected to be one of the year’s largest initial public offerings (IPOs), the Wall Street Journal has reported.
The IPO of IHH Healthcare Bhd., a Malaysian healthcare services provider, is expected to raise $2 billion and come just behind Facebook and Felda Global Ventures Holdings in terms of size of listing this year.
The move will involve at least two sovereign wealth funds, as IHH is majority-owned by the country’s sovereign wealth fund, Khazanah Nasional. The EPF will invest $200 million in the IPO and the KIA will commit $150 million, the WSJ’s source said. The IHH will be dual listed on the Malaysian and Singaporean stock exchanges by the end of July.
According to the aiGlobal 500, the KIA is the word’s eighth largest sovereign wealth fund with more than $250 billion in assets. The EPF is Malaysia’s biggest pension fund—the aiGlobal 500 pegged its assets at about $150 billion.
Kuwait’s investment in the Malaysian company’s IPO is noteworthy in that it bucks the recent trend of Asian capital shifting into domestic markets to act as a buffer to European troubles. South Korea’s National Pension Service’s announcement this week that it would up its investment in domestic equities and the EPF’s decision to act as a cornerstone investor for IHH’s IPO can be seen as steps to bolster their own country’s equity markets as Europe totters. Additionally, China’s $150 billion National Social Security Fund and the $410 billion China Investment Corporation (CIC) both acted to shift capital into China, with the CIC explicitly making the move at the expense of its European equity and fixed income investments.