Malaysia’s $31 billion sovereign wealth fund Khazanah Nasional has appointed Amirul Feisal Wan Zahir as its new managing director, effective July 16.
Feisal will replace Shahril Ridza Ridzuan, who will be departing after his three-year term ends in August "to pursue his personal interests,” the fund said in a statement on Tuesday (June 29).
Amirul Feisal Wan Zahir
There had been speculation that Ridza was set to leave after the fund posted a 61% drop in profits for 2020 in March. However, Sime Darby chief executive Jeffri Salim Davidson was largely expected to be Ridza’s replacement.
Feisal joins from Maybank, which counts a trustee company under Malaysia’s ministry of finance as its biggest shareholder. He has been group chief financial officer (CFO) since 2016 and joined the bank as group head of global banking in 2014.
In a statement on Monday (June 28), Maybank said it had commenced the process of identifying his replacement. In the interim, group financial controller Khalijah Ismail has been appointed acting group CFO.
Ridza is the latest chief at a Malaysian government-linked investment company (GLIC) to depart, following changes at Permodalan Nasional (PNB), Employees Provident Fund (EPF), Kwap and, most recently, the Armed Forces Fund Board (LTAT).
Observers noted that changes of leadership at GLIC are often politically fueled and dependent on leaders’ willingness to concede to the demands of the government.
Most recently, Malaysia’s pilgrim fund Tabung Haji came under scrutiny for poor governance, which observers say stems from the government’s desire to deviate the fund from its original mandate.
Shahril Ridza Ridzuan
During his tenure, Ridza restructured Khazanah’s holdings, splitting them into a commercial and a strategic fund.
The latter includes Malaysia Airlines parent company Malaysia Aviation Group; Malaysia Airports Holdings; state telco Telekom Malaysia and national electricity company Tenaga Nasional in its portfolio. Its recent divestments include loss-making chipmaker Silterra Malaysia in February 2021.
"It looks Khazanah continues in its full new strategy: the division of the two funds, and the use of the strategic fund to manage and divest key state-owned companies," said Javier Capapé, director of sovereign wealth research at Madrid-based IE University's Centre for the Governance of Change.
He added that changes made by the departing chief executive paid off: "A growth of more than 50% in global equities, a reduction of 8% in public domestic equities, and multiplying by four the exposure to the US helped protect the portfolio from the weak evolution of the domestic markets (both private and public equities)."
However, he highlighted the conflicts of interest and possible governance issues that sovereign wealth funds face when having to balance financial goals with strategic goals for the country. "I think this type of pressure (either acting correctly or with biased interests) is always great and this accountability pressure can be exhausting."
Prior to joining Khazanah, Ridza was chief executive at EPF, Malaysia’s largest pension fund, between 2013 and 2018.
Experts previously told AsianInvestor
that Khazanah’s poor 2020 results can be blamed on
the strategic fund’s exposure to aviation and tourism assets, which had been heavily impacted by the Covid-19 pandemic.
In the past year, the fund was forced to recognize a $1.2 billion impairment loss associated to Malaysia Airports Holding and hospitality group Themed Attractions Resorts & Hotels, to distribute a $0.5 billion dividend to the government and to rescue Malaysian Airlines with a $890 million injection, noted Diego Lopez, managing director of consultancy Global SWF.
"As a manager of the fund, Shahril Ridza was frustrated and did not hesitate to voice his concerns, which I am sure was not liked by politicians or the Board," he added.
Last week, prime minister and Khazanah chairman Muhyiddin Yassin said he anticipated 2021 to be a “difficult year” for Khazanah
, given its continued exposure to aviation and tourism, which are not expected to recover before 2023.
A former GLIC executive familiar with the matter said it was Ridza’s decision not to stay on, despite the government's attempts to convince him otherwise. He described Ridza as “extremely professional” and "trusted by any government, no matter which political party is in power.”
An executive at a Malaysian asset manager who declined to be named affirmed that he was well-liked and respected among his staff.
Both executives declined to comment on why he chose to depart.
This article has been updated with analyst comments.