Malaysia-based Kenanga Investment Bank has brokered a deal to acquire Shariah-compliant investment management services provider i-VCAP Management, which specialises in Islamic exchange-traded funds (ETFs).
The deal, subject to approval by the Securities Commission of Malaysia, will be carried out through Kenanga’s fully-owned subsidiary Kenanga Investors. Financial details of the transaction were not shared.
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The deal represents Kenanga’s second bolt-on purchase of an asset management business, after the purchase of Libra Invest Berhad at the end of 2019.
The group has been actively involved in joint ventures, acquisition exercises as well as strategic stakes within synergistic businesses.
Expansion into the ETF space
The latest purchase is said to mark Kenanga Group’s swift evolution in the ETF space.
Last year, the group made its entry to the segment by launching Malaysia’s first KLCI-linked leveraged and inverse ETFs in partnership with its strategic partner Yuanta Securities.
Kenanga Investment Bank Group managing director Datuk Leong said that the deal further expands the firm’s ability to build more diversified portfolios through its product capabilities across the group and bolster the range of solutions available.
Leong noted: “This addition strengthens our competitive edge in addressing client needs, which will further accelerate the growth of our business.”
Kenanga Investors CEO Ismitz Alwis added that i-VCAP’s ETFs business is “highly complementary” to OneETF by Kenanga.
He added that the purchase will broaden the company’s geographical reach, product suite and investment expertise, allowing it to offer more solutions to help clients achieve their investment objectives.
With the deal, Kenanga Investors is looking to further develop its current ETFs business to add more diverse range of ETFs in collaboration with its partners, regulators, and other service providers to drive the ETFs and Islamic capital market.
