The sovereign wealth fund, which owns stakes in mobile services provider Axiata Group Bhd and property firm UEM Sunrise Bhd, has been increasing activity abroad to reduce the risk of being heavily invested at home.
But elections or leadership change in Turkey, India and Indonesia, as well as their uncertain economic outlook and weakening currencies, make for a cautious outlook for 2014, the fund said at its annual review on Monday.
Last year, the value of Khazanah's portfolio rose 11% from a year earlier to RM134.9 billion ringgit as at December-end, the fund said, attributing the growth to improved operational performance at the companies it owns.
Last year "did not have the big deals that grabbed the headlines, but it was an important year," Managing Director Azman Mokhtar said at the review. Investee companies have been expanding throughout the region and the world, he said.
Khazanah last year partnered Canada's Sun Life Financial Inc to buy the Malaysian joint venture of British insurer Aviva Plc and local lender CIMB Group Holdings Bhd, to add to its growing portfolio of insurance assets.
The fund is considering further investment in insurance, particularly in emerging economies where the sector is likely to benefit from rising incomes, said Azman, adding the fund cannot concentrate too much on a particular sector or country.
"We have to match it to our geographical footprint. We are in no hurry; we can wait."
Khazanah, whose investments are around 90% domestic, made a visible push to expand abroad last year.
It spent US$252 million (RM835.7 million) to buy 90% of Turkish insurer Acibadem Saglik ve Hayat Sigorta, and bought a minority stake in Beijing Enterprises Water Group Ltd for US$152.1 million (RM504.4 million).
Most notably, it bid for a US$1.8 billion (RM5.97 billion) stake in Thailand's Bank of Ayudhya Pcl, but lost out to Japan's Mitsubishi UFJ Financial Group.
Khazanah sold off five assets it considered not central to its operations over the past two years, the last of which was its interest in TIME Engineering Bhd for around US$21.3 million (RM70.6 million) in September.
The fund divested RM51.4 billion worth of assets in 2004 to 2012, including car maker Proton Holdings Bhd, now a unit of DRB-Hicom Bhd, and postal services provider Pos Malaysia Bhd. - Reuters, January 20, 2014.