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Malaysia Sovereign Wealth Chief Defends Parkway Acquisition

The head of Malaysia’s government investment arm Khazanah Nasional has defended its purchase of Singapore hospital operator, Parkway Holdings last year.

Doctor talking to female patient in office
Jamie Grill | Iconica | Getty Images
Doctor talking to female patient in office

The sovereign wealth fund outbid India’s Fortis Healthcare and ended up paying $2.6 billion for the 76.1 percent stake it didn’t already own.

“For something like healthcare, the circumstances were that we had to defend our assets in Parkway,” Azman Mokhtar told CNBC’s Managing Asia program, referring to the 23.9 percent stake it held before the bidding war begin. “It was a hostile situation. You know it was purely business but it was hostile nonetheless as what we know.”

Analysts said Khazanah had paid a premium for Parkway and the head of Fortis said that they were happy to let someone else buy it at that price.

But Mokhtar says the purchase was a good decision because the sector is growing at double digits. “As it turned out for 2010, Singapore’s [Parkway Holdings] grew a bit more than 16 percent… So when you have that kind of high quality recurring growth, you know you’re on to something,” he added.

The acquisition gives Khazanah control over 16 hospitals in Asia and allows it to consolidate its new acquisition with its existing healthcare assets, such as Pantai Holdings.

Mokhtar says Khazanah will continue to expand overseas in a measured way. And he pointed out that a number of Khazanah portfolio companies such as mobile phone operator Axiata and lender CIMB get a large part of their revenues from outside Malaysia already.

“CIMB and Axiata (are) two of our more advanced companies in the region. For Axiata, more than half is already overseas, so it’s about right at this stage.”

This interview is an excerpt from CNBC’s longest-running feature program Managing Asia. Catch the full interview with anchor Christine Tan every weekend on CNBC.