Khazanah mulls closing down London office

KUALA LUMPUR: Khazanah Nasional Bhd is considering closing its London office to cut operating costs as uncertainty over the UK’s exit from the European Union looms.

High-cost base operations “may not go well with our plans for the near future, so we are looking at closing London”, Shahril Ridza Ridzuan, Khazanah’s managing director, said in an interview today.

The decision is “less to do with Brexit but more to do with our plans in the near future”, he said.

The sovereign wealth fund, owner of stakes in some of the nation’s biggest listed companies, is seeking to cut non-performing assets in the wake of a slump in the net worth of its portfolio amid an uncertain global economy.

The Brexit drama adds more gloom as the prospect of a clean break with the EU on the March 29 exit deadline unnerves Asian companies.

Khazanah’s total returns are represented by growth in net value of its portfolio, which declined 21.6% in 2018 to RM91 billion.

Its assets include stakes in Tenaga Nasional Bhd, Axiata Group Bhd and CIMB Group Holdings Bhd.

Khazanah, which has a staff of 10 in its London office, will also scale down its operations in Turkey, Shahril said.

Khazanah’s managing director Shahril Ridza Ridzuan.

“We have started to exit the investments we have there.”

As such, Khazanah doesn’t require such a big presence, he said, without being more specific.

Both the US and China remain very important to Khazanah because “we have a very big interest in technology and so those offices remain relevant”, he said.

Shahril, who previously headed the Employees Provident Fund, took over the reins of Khazanah from Azman Mokhtar in August.

Following last May’s general election, the new government under Prime Minister Dr Mahathir Mohamad sought a reset of Khazanah, which involved a refreshed mandate for the fund.

Shahril told Bloomberg Television earlier that while Khazanah will focus on growing Malaysia’s assets base for the long term, it has no plans to pull back on its overseas investments as it seeks to optimise risk-adjusted returns over a 10-year period.