Khazanah Nasional has agreed to sell a top-tier hospital in Malaysia’s capital to IHH Healthcare, Asia’s biggest private hospital group and one of its portfolio companies, in the latest sign of the sovereign wealth fund's willingness to sell down healthcare assets as it seeks to monetise some of its direct investments.

Malaysia’s sovereign wealth fund struck a deal worth MYR1.02 billion ($244 million) with IHH for the sale of Prince Court Medical Centre, a 277-bed hospital located within the Golden Triangle business district of Kuala Lumpur.

The resort-styled hospital was named the world’s top hospital for medical tourists in 2013 and 2014. Khazanah bought it from state-owned oil and gas company Petronas for an undisclosed price last year.

Prince Court Medical Centre will add to IHH’s existing network of 15 hospitals located across Malaysia, mostly under the Gleneagles and Pantai brands.

“Given the recent change in Khazanah’s refreshed mandate, the decision was made to sell Prince Court to IHH, Khazanah’s healthcare platform,” Khazanah's managing director Shahril Ridza Ridzuan said in a statement about the divestment.

Shahril Ridza Ridzuan

“Khazanah is confident that Prince Court will further benefit from IHH’s wealth of experience in providing premium healthcare, while solidifying IHH’s position as a leading Malaysian healthcare operator, where we remain as a substantial shareholder with a 26.04% stake.”

The transaction marks yet another divestment by Khazanah in the healthcare sector. The sovereign wealth fund most recently offloaded a 16% allocation in IHH to Japan’s Mitsui Group for $2 billion in November last year.

That offload surprised many market onlookers at the time, not least because Khazanah had spent several years building up its stake in the healthcare provider under the previous managing director. 

But Shahril, who took over as Khazanah's managing director in August 2018 after shifting from the Employees Provident Fund, said the decision to sell down the IHH stake was reflected Khazanah's view it was time to cash in an asset had gained good value.

“The divestment is part of Khazanah’s strategy to grow the businesses that we have invested in and to find the appropriate time and value to create liquidity for our future capital and investment needs," he told The Edge Malaysia in an interview in February. 

Khazanah expects the sale of the Prince Court hospital to IHH to be completed in the first quarter of next year.