Jan 22, 2010, New Delhi: Reliance Capital Asset Management Company is negotiating with Malaysia to manage up to $5 billion (Rs 23,000 crore) of public and government funds, including money that is part of the national pension fund, persons aware of the development said. Malaysia is also in talks with other global fund managers for the deal and Reliance Capital expects to win a mandate to manage around half the $5 billion that the southeast Asian nation`s government wants private asset mangers to handle.

Investment arms called government-linked investment companies (GLICs) manage the funds now and they also own stakes in a number of top Malaysian companies. Such companies, called government-linked companies (GLCs), include Telekom Malaysia, automaker Proton and Malaysia Airlines. Surplus cash with some of the GLCs will also be managed by private fund mangers.

“He (Mr Ambani) is looking to manage some of Malaysia`s portfolio assets. Also, some of our GLCs,” Malaysian Prime Minister Najib Razak told ET after a meeting with Mr Anil Ambani. “He is also interested in managing the Malaysia Employees Provident Fund which has huge savings. The company is looking at managing a substantial amount of this fund.”

Malaysia EPF, the national pension fund with about $9 billion under management, is one of the government`s main investment arms. The others include Khazanah Nasional, Permoddalan Nasional, Lembaga Tabung, Angkatan Tentra and Lembaga Tabung Haji.

Government-linked firms account for over a third of the market value of the companies in the main index of the Bursa Malaysia stock exchange. The government is in the middle of a restructuring exercise involving the GLCs, unlocking its holdings in many of them to raise capital.

Reliance Capital, India’s biggest asset manager, has been appointed by the Indian government to manage both public funds sponsored by it, the provident fund and the pension fund. Reliance Capital won permission in November 2008 from the Malaysian government to launch an Islamic fund to make Shariah-compliant investments.

Reliance Asset Management (Malaysia) Sdn Bhd will be the flagship venture in the Islamic asset management business and a global hub for Shariah-compliant products, said Vikrant Gugnani, CEO, International Businesses.

“The long-term objective is to target the retail Shariah market in the region and we are already hiring top talent from the Shariah field for this business. This is also in line with the strategy to expand our fund management footprint across key global markets,” he added.