Empowered to uplift Bumiputera welfare, Malaysian state investment fund created Australian billionaires instead

 by Ganesh Sahathevan 

             

The Daily Telegraph of Melbourne has published a story about the super yacht Lady E and its owner,  billionaire David  Russell , who is from Melbourne but now lives in Singapore. 

In 2019 Euromoney published an investigative story about how Russell made his billions,.The story included a reference to an entity representing the "Malaysian state": 

The inside story of Equis and its partners’ $800 million bounty

                                                              The partners (led by Australian David Russell ),most of them ex-Macquarie bankers, had delivered for their investors, who included some of the biggest institutional names in the world: the University of Texas/Texas A&M Investment Company (Utimco), Partners Group, Willis Towers Watson, BlackRock, JPMorgan Pension, numerous Australian superannuation funds, and others representing the Dutch, German and Malaysian state.                                                                                                         

Over $500 million of the proceeds was allocated to a separate vehicle from which the limited partners (LPs – investors like pension funds) were excluded. The result of that was that David Russell and his colleagues are believed to have walked away with as much as $800 million, more than 20% of the gross equity proceeds. Even in the high-octane world of private equity, that’s quite something.

Did they take away too much? Since they were entitled to hundreds of millions of dollars by any estimation, wasn’t that enough? David Russell and his partners legitimately made a fortune out of the Equis Energy sale. The question is whether more of the proceeds should have been shared with the pensioners and endowments who were ultimately funding the enterprise.

Malaysian state investment entities are expected to uplift Bumiputera welfare. In this case it appears that the unnamed Malaysian state entity created Australian billionaires instead.The Equis deal does not seem to have received much publicity in Malaysia; it is perhaps time for Malaysian agencies to ask what it is that drove the managers of the entity to be so generous to a non-Bumiputera, and a foreign one at that.

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